Julio purchased some power tools totaling $2,174 using a six-month deferred payment plan with an interest rate of 28.19%. He did not make any payments during the deferment period. What will the total cost of the power tools be if he must pay off the power tools within two years after the deferment period?

A. $2,499.00

B. $3,297.84

C. $2,174.00

D. $4,122.30

Question

Julio purchased some power tools totaling $2,174 using a six-month deferred payment plan with an interest rate of 28.19%. He did not make any payments during the deferment period. What will the total cost of the power tools be if he must pay off the power tools within two years after the deferment period?

A. $2,499.00

B. $3,297.84

C. $2,174.00

D. $4,122.30

anonymous · Answer

I got A but I'm not sure.

jjenk · Answer

A

anonymous · Answer

How'd you get that?

anonymous · Answer

So every six months he has to pay an extra 28.19% of 2,174

anonymous · Answer

I guess

anonymous · Answer

What I did was 2,174(1+ 0.2819/12)^12*6/12 and I got $2498.995 which rounds off to 2499.00

anonymous · Answer

But I don't know if I did it correctly

anonymous · Answer

P = C (1 + r/n)^ nt
where
    P = future value
    C = initial deposit
    r = interest rate (expressed as a fraction: eg. 0.06)
    n = # of times per year interest in compounded
    t = number of years invested

anonymous · Answer

Sooo did I do it right the first time?

anonymous · Answer

Alright whatever, I'll just go with my original answer