Question

Ben made some home improvements for $9,375 using a six-month deferred payment plan with an interest rate of 19.42%. What is the balance after the deferment period if no payments are made?

Answer 1

Is the 19.42% the interest rate per month?

Answer 2

It doesnt say?

Answer 3

The options are

10,322.95

$9,375.00

$11,195.63

$10,244.95

If that helps ?

Answer 4

Ok, it looks like the 19.42 % interest rate is for that 6 months.

In that case, you just need to find out what 19.42% of 9,375 is. and add it to the amount he borrowed.

Answer 5

11,195.63?

Answer 6

Thank you!

Answer 7

YEs. Another way to do it is by multiplying the total 9,375 by 1.1942

1.1942 is the total cost + the interest rate. Pretty neat.

Answer 8

So how would you solve if it gives you the amount of years?

Answer 9

Bailey purchased a home entertainment center for $3,276 using an 18-month deferred payment plan with an interest rate of 26.24%. She did not make any payments during the deferment period. What will Bailey’s monthly payment be if she must pay off the home entertainment center within three years after the deferment period?

Answer 10

Again, we need to find out the total owed after the deferred payment process

Answer 11

This deferment stuff confuses me !

Answer 12

Deferred payment means they choose to pay nothing for an amount of time and instead get charged an interest rate.

In this case, he isn't paying for the center for 18 months and he gets charged 26.24% of what it costs. That becomes his new total that he has to pay.

You must find out how what his total is after the interest is applied.

Answer 13

4,135.62, is the new total with interest applied.

Answer 14

So then, I would do

that times or divided by three?

Or would I do interest for 3 years?

Answer 15

Ok. So that is his new total. Now, he has to pay that off in three years with monthly payments.

Answer 16

Keyword is MONTHLY payments for 3 years.

Answer 17

Oh! I overlooked that!

Answer 18

We found the total 4135.62 and now he has to pay that off. In how many months?

Answer 19

36?, so it would be 115.87 a month?

Answer 20

Check your math again on the division, otherwise good method.

Answer 21

`I got 114.87? but thats not an answer choice

Answer 22

I did, 4135.62/36

Answer 23

That should be your answer.

Answer 24

$134.32

$195.44

$91.00

$195.09

those are the choices

Answer 25

Is everything in your problem correct, the cost, the interest rate?

Answer 26

Yes that is the exact question

Answer 27

I don't know how else to put it then? Unless you're picking the option closest without going under, but I doubt that's the case here. I don't know what else to tell you. That's the entire problem with the correct answer.

Answer 28

Hmm,, I guess Ill just pick the closest answer. It makes no sense. Ill ask her to work it out for me when Im done just out of curiosity what we did wrong. Thank you though! Best answer awarded!