Andrew purchased a living room set for $2,276 using an 18-month deferred payment plan with an interest rate of 23.49%. What is the balance after the deferment period if no payments are made?

$2,276.00

$2,810.63

$3,123.34

$3,226.39

Question

Andrew purchased a living room set for $2,276 using an 18-month deferred payment plan with an interest rate of 23.49%. What is the balance after the deferment period if no payments are made?

 $2,276.00

 $2,810.63

 $3,123.34

 $3,226.39

anonymous · Answer

That's a high interest rate.  Okay here we go:

Financial Calculator
PV = $2,276
n = 1.5 (18 months converted to years)
i = 23.49
which gives you a future value of $3,123.34 (rounded to two decimal places)

Formula:
$$FV = P(1 + \frac{ r }{n })^{nm} $$
Where:
FV= future value
p = Principle (present value)
r = interest rate
n = compounding periods per year
m = number of years