Albert purchased a bedroom set for $4,317 using a six-month deferred payment plan with an interest rate of 28.79%. What is the balance after the deferment period if payments of $192 are made each month?

$3,824.92

$4,317.00

$3,165.00

$4,976.92

Question

Albert purchased a bedroom set for $4,317 using a six-month deferred payment plan with an interest rate of 28.79%. What is the balance after the deferment period if payments of $192 are made each month?

 $3,824.92

 $4,317.00

 $3,165.00

 $4,976.92

tkhunny · Answer

4317 * 0.2879 / 12 = 103.57 - This is the interest in the first month.

Paying $192 / month, which is more than 103.57, this rules out 4317.00 (paying off the interest) and 4976.92 (interest and maybe more accruing).

Now what?