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?
A. $83.13
B. $16.63
C. $87.28
D. $20.78

Question

>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?
A. $83.13
B. $16.63
C. $87.28
D. $20.78

anonymous · Answer

ok this is what i got but im not 100% sure
total cost of computer = (875)(1.05) = 918.75
so far you paid for 7 months so subtract 700 = 218.75 left over still need to be paid
on the 8th month you missed the payment so the interest accrued is from the cost left over to the cost so do (218.75)(8/12) to get the interest for the remaining months which is around 145.83333 next you need to multiply by the apr  and you will get $20.78 interest charged so D