Question

A customer at an electronics store opened a store credit card to purchase a computer for $1,800. The store put the entire purchase on the credit card with an APR of 17.99%. The customer pays $125 per month until the balance is paid off. Determine the total amount of interest paid.

A spreadsheet was used to calculate the corect answer. Your answer may vary slightly depending on the technology used.
A. $188.09
B. $295.01
C. $243.11
D. $182.45

Answer 1

To determine the total amount of interest paid, divide the total purchase amount by the monthly payment to find the number of months needed to pay off the balance. Multiply the monthly payment by the number of months to get the total amount paid. Subtract the original purchase amount from the total amount paid to find the total interest paid.

Step-by-step explanation:

To determine the total amount of interest paid, we need to calculate the number of months it will take to pay off the balance. Divide the total purchase amount by the monthly payment: $1800 / $125 = 14.4 months. Since we can't have a fraction of a month, round up to the nearest whole month, which is 15 months.

Next, we can calculate the total interest paid by subtracting the original purchase amount from the total amount paid. The total amount paid is equal to the monthly payment multiplied by the number of months: $125 * 15 = $1875. Finally, subtract the original purchase amount from the total amount paid to get the total interest paid: $1875 - $1800 = $75.

Therefore, the total amount of interest paid is $75.

Answer 2

I think it’s A

Sorry if I’m wrong