Salina purchased a dining room set for $1,730 using a 12-month deferred payment plan with an interest rate of 23.45%. She did not make any payments during the deferment period. What will the total cost of the dining room set be if she must pay off the dining room set within two years after the deferment period?

Question

anonymous · Answer

@jim_thompson5910 @Hero @Directrix @campbell_st

campbell_st · Answer

so is the interest simple of compound..?

anonymous · Answer

must be compounded

campbell_st · Answer

ok... so the compound interest formula is 

$$A = P ( 1 + \frac{r}{100})^n$$

A = future value, P = principal or initial amount, r = interest rate and n = number of time periods. 

so I'd assume that n = 2 and r = 23.45 and P = $1730

substitute them into the equation can calculate the actual cost( future value) of the dining room set

anonymous · Answer

mm.. yah i got it
so it would be:
2,754.72
the final answer
:)

anonymous · Answer

thxss man :)

campbell_st · Answer

I haven't done the calculation but its around $425 more using terms

anonymous · Answer

yah.. i did all the calculation.. like, u gave me what i was missing of knowledge to do it by myself.. thanks again :)

campbell_st · Answer

glad to help

anonymous · Answer

wanna help me with some more? (i can tag you)