Matthew purchased a washer and dryer for $2,315 Using an 18-month deferred payment plan with an interest rate of 24.92%. What is the balance after the deferment period if payments of $95 were made each month?

Question

anonymous · Answer

@ranga

ranga · Answer

Do you have the formula for the deferred payment plan?

anonymous · Answer

no I don't what happened was that I am taking part A and part B this semester so they cut this class down a lot I couldn't even have my teacher help me because I had to be so far ahead and she had students on other stuff

ranga · Answer

Then you may have to wait on someone who knows for sure how these things are calculated.  Here the deferment period is 18 months.  If the entire loan is paid off within 18 months then no interest will be charged.  But if after the end of the 18 month period there is a balance, then I think back interest is calculated on the unpaid amount.  This is the point someone needs to verify.

$95 a month for 18 months is 95 x 18 = $1710.

Remaining balance at the end of the 18 month deferment period = $2,315 - $1710 = $605.

I think back interest is calculated on this balance of $605 for 18 months (or 1.5 years) at interest rate of 24.92% APR

interest = 605 x 24.92 x 1.5 / 100 = $226.15

This added to the balance $605 gives $831.15

So I think the balance is $831.15 but not 100% positive.  Do you have the answer choices?

anonymous · Answer

$1,641.41
$3,351.41
$605.00
$2,315.00

anonymous · Answer

so I think it would be just the first part

ranga · Answer

We are not getting any of their answers. So we need to use some other method.  Normally in the book they will have examples and the formula and if you give me the formula from the book then I can help with the math portion of it.

anonymous · Answer

i have a monthly payment formula

anonymous · Answer

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