Matt purchased a washer and dryer for $2,885 using an 18 month deferred payment plan with an interest rate of 26.12%. What is the account balance after there deferment period if payments of $85 were made each month?

Question

tkhunny · Answer

You will need a description of EXACTLY what it is that is deferred.

2885*0.2612/12 = 62.80

Okay, so $85 / month will cover the monthly interest.

Where does that leave us?

anonymous · Answer

Do you divide 85 by 62.80, I got $1,355.00 @tkhunny

anonymous · Answer

& thank you for replying @tkhunny

tkhunny · Answer

Why would you do that division?  Where did you get $1,355.00?

anonymous · Answer

Idk I'm quite confused, I just thought that you would divide the two

tkhunny · Answer

Why?  Answer that and you will diminish your confusion.

tkhunny · Answer

How does the deferment plan work?

Is the NO interest during the deferral period?

2885 - 18*85 = 2885 - 1530 = 1355

Is interest accrued during the deferral period, you just not required to pay it?

2885 + 1047.07 - 1530 = 2402.07

Does it SEEM like there is no interest during the deferral period but it magically appears if you don't pay it off in the 18 months?

2885 + 1047.07 - 1530 = 2402.07

What EXACTLY are the terms?