Question

Milton opens a store credit card when he purchases appliances for his kitchen. The interest rate is 17.45%. He charges $3,740 to the card, and can pay $1,350 per month. What will the total cost of his purchase be?

Answer 1

Loan amount $3,740; First month interest at 17.45%/12 months is $54.39. For a total due of $3,794.39.

First payment of $1,350 brings the balance down to $2,444.39.

Second month interest at 17.45%/12 months is $36.06. The balance is now $2,480.45.

Second payment of $1,350 brings the balance down to $1,130.45.

Third month interest at 17.45%/12 is $16.44. The balance is now $1,146.88.

Last payment of $1,146.88 pays the charge off.

The total cost of the purchase is $3,846.88