Question

Fiona installed a new pool for $9940 using a 12 month deferred payment plan with an interest rate of 22.53%. What is the balance after the deferment period A payment of $397 are each month?

A. $7,761.84B. $9,940.00C. $5,176.00D. $12,425.84

Answer 1

A. $7,761.84

Step-by-step explanation:

Balance after deferment period before any payment made.

A = P(1 + r)^t

A = $9940*(1 + 0.2253)^(12/12)

A = $12179.5

Final balance after monthly payment.

A_f = $12179.5 - (12*397)

A_f = $7415.5

Therefore, The balance after the deferment period A payment of $397 are each month is $7,761.84.