You purchase a computer for $875.00 plus 5% sales tax. You decide to finance it through the store's 0% program for 12 months. The terms state that you must pay $100.00/month and that if you miss a payment, you will be assessed a late fee of $39.00 plus the interest accrued to that point at a 14.25% APR. If you miss a payment in the eighth month, how much interest will you be charged?
(Please explain how you got the answer)
$83.13
$16.63
$87.28
$20.78
it's 87.28 just took this
its 87.28 i just took it too it is correct it said 11:16am 5/28/2018
YAS ITS 918.75*.1425*8/12 AND DAT EQUALS 87.28 AYYYE LESS GET ITTTTTTTT
I = Po*r*t = 875*(0.1425/12)*8 = $83.13
it is $87.28
To calculate the interest charged in the eighth month, you need to determine the balance of the remaining payments at that point.
First, calculate the total cost of the computer including sales tax:
Computer cost = $875.00
Sales tax (5%) = $875.00 * 0.05 = $43.75
Total cost = $875.00 + $43.75 = $918.75
Next, calculate the remaining balance by subtracting the payments made in the first seven months:
Total payments made in the first seven months = $100.00/month * 7 months = $700.00
Remaining balance = Total cost - Total payments made = $918.75 - $700.00 = $218.75
Now, calculate the interest charged on the remaining balance at 14.25% APR for one month:
Interest rate per month = 14.25% / 12 months = 1.1875%
Interest charged = Remaining balance * Interest rate per month / 100 = $218.75 * 1.1875 / 100 = $2.60 (rounded to the nearest cent)
Finally, add the late fee of $39.00 to the interest charged:
Total interest charged = Interest charged + Late fee = $2.60 + $39.00 = $41.60
Therefore, the correct answer is $41.60, which is closest to $41.60.