Question

Samantha purchased a dining room set for $2,910 using a 12-month deferred payment plan with an interest rate of 22.98%. She did not make any payments during the deferment period. What will Samantha’s monthly payment be if she must pay off the dining room set within two years after the deferment period?

$121.25

$160.02

$191.33

$152.24

Answer 1

b

Answer 2

How'd you get that? @Courage.

Answer 3

it's not B

how much will the balance be after 12 months?

Answer 4

It doesn't say?

Answer 5

use the compound interest formula

A = P(1+r/n)^(n*t)

Answer 6

in this case

P = 2910
r = 0.2298
n = 12
t = 1

Answer 7

I did

Answer 8

and you got ?

Answer 9

3653.85

Answer 10

that's essentially your starting balance when you start to make payments

Answer 11

from here, you use this formula

P = L((r/n)*(1 + r/n)^(n*t))/((1 + r/n)^(n*t) - 1)


where,


P = monthly payment

L = total amount loaned or amortized

r = annual interest rate (APR)

n = number of times interest is compounded per year (compounding frequency)

t = time in years


In this case,


P = unknown (we're solving for this)

L = 3653.85

r = 0.2298 (22.98% = 22.98/100 = 0.2298)

n = 12

t = 2

Answer 12

I got 37.80

Answer 13

I probably did something wrong but this is all so confusing

Answer 14

Can you please plug everything in for me?

Answer 15

that's too low

Answer 16

P = L((r/n)*(1 + r/n)^(n*t))/((1 + r/n)^(n*t) - 1)


P = 3653.85((0.2298/12)*(1 + 0.2298/12)^(12*2))/((1 + 0.2298/12)^(12*2) - 1)


P = 191.327925436298


P = 191.33

Answer 17

I recommend you practice (a lot) with the formula

once you get comfortable with it, you can use this calculator to speed things up

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

Answer 18

Oh okay I placed everything right my calculator just did something wrong.

Answer 19

Thanks!

Answer 20

yw