Alex bought a new easy chair for $399. She bought it on the "12 months is the same as cash" plan. The contract stated that if not paid in 12 months, she would be assessed 14 percent APR, dated from the first day of sale. If she pays it off on the thirteenth month, how much will she have to pay?
454.86
To calculate the amount that Alex will have to pay if she pays off the chair on the thirteenth month, we need to consider the additional charges due to the 14 percent Annual Percentage Rate (APR). Here's how we can compute the total cost:
1. Determine the interest charged for 13 months:
- Multiply the original purchase price ($399) by the APR (14%): 399 * 0.14 = $55.86
- Divide the interest amount by 12 to get the monthly interest: 55.86 / 12 = $4.66
- Multiply the monthly interest by 13 to calculate the total interest for 13 months: 4.66 * 13 = $60.58
2. Add the total interest to the original purchase price:
- $399 (original price) + $60.58 (total interest) = $459.58
Therefore, if Alex pays off the easy chair on the thirteenth month, she will have to pay a total amount of $459.58.
To calculate the amount Alex will have to pay if she pays off the chair on the thirteenth month, we need to consider the interest accrued for the thirteen months.
Step 1: Calculate the interest for the first 12 months.
Loan amount = $399
APR (Annual Percentage Rate) = 14%
Interest for 12 months = Loan amount * (APR/100) * (12/12)
= $399 * (14/100) * (12/12)
= $66.42
Step 2: Calculate the interest for the thirteenth month.
Interest for the thirteenth month = Loan amount * (APR/100) * (1/12)
= $399 * (14/100) * (1/12)
= $46.45
Step 3: Calculate the total amount to be paid.
Total amount = Loan amount + Interest for 12 months + Interest for thirteenth month
= $399 + $66.42 + $46.45
= $511.87
Therefore, if Alex pays off the chair on the thirteenth month, she will have to pay a total of $511.87.