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 you pay nothing until the 12 months are over. When you receive the bill, you forget to pay it and are assessed a late fee of $39.00 plus the interest accrued to that point at 14.25% APR. How much interest will you be charged?

LEGIT?

To calculate the interest charged, we need to find the interest accrued over the 12-month period.

First, calculate the total cost of the computer including sales tax:

Computer cost = $875.00
Sales tax = 5% of $875.00 = 0.05 * $875.00 = $43.75
Total cost = Computer cost + Sales tax = $875.00 + $43.75 = $918.75

Since you opted for the 0% financing program, you won't be charged any interest during the 12 months. However, if you forget to pay the bill, you will be faced with a late fee of $39.00.

Therefore, the interest charged will be $0.00.

To calculate the interest charged, we need to find the total amount that has been financed.

The purchase price of the computer is $875.00, and since there is a 5% sales tax, you need to add 5% of $875.00 to the purchase price:

Sales tax amount = 5% of $875.00
Sales tax amount = 0.05 * $875.00
Sales tax amount = $43.75

The total purchase price, including sales tax, is therefore:

Total purchase price = $875.00 + $43.75
Total purchase price = $918.75

Since you opted for the store's 0% financing program, you do not pay anything until the 12-month period ends. However, if you missed the payment, you were assessed a late fee of $39.00.

Now, we need to calculate the interest charged on the remaining balance after the 12-month period. To do this, we need to find the balance at the end of the 12 months. Assuming equal monthly payments and no additional fees or charges, the monthly payment amount would be:

Monthly payment amount = Total purchase price / Number of months
Monthly payment amount = $918.75 / 12
Monthly payment amount = $76.56 (rounded to the nearest cent)

Since you missed the payment, the balance after the 12-month period would be:

Balance after 12 months = Total purchase price - (Monthly payment amount * 12)
Balance after 12 months = $918.75 - ($76.56 * 12)
Balance after 12 months = $918.75 - $918.75
Balance after 12 months = $0.00

Therefore, there is no remaining balance after the 12-month period. And since there is no remaining balance, no interest will be charged.

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