Question

1 point

Barbara financed a new bedroom set at the furniture store for $1,800. The store offered no interest for 6 months or 20 percent annually if the balance

was not paid in full prior to the end of the interest free period. How much interest will she be charged once she lets the account go past 6 months

before making a payment?

Answer 1

She will be charged $180 once lets the account go past 6 months before making a payment.

Explanation:

This is a simple interest problem.

The simple interest formula is given by:

`E = P*I*t`

In which E is the amount of interest earned, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

After t years, the total amount of money is:

`T = E + P`

In this question:

If she pays within 6 months, she is not charged any interest.

However, if after 6 months she has not paid the balance, she is charged 20% interest for this period.

Barbara financed a new bedroom set at the furniture store for $1,800.

This means that
`P = 1800`

20 percent interest

This means that
`I = 0.2`

How much interest will she be charged once she lets the account go past 6 months?

6 months is half a year, so this is E when
`T = 0.5`

`E = P*I*t`

`E = 1800*0.2*0.5`

`E = 180`

She will be charged $180 once lets the account go past 6 months before making a payment.