WILL MEDAL FOR RIGHT ANSWER

Your original purchase price was $950.00 plus 5% sales tax. You enter into an agreement where the
interest (12.5% APR) is waived for the first 12 months provided you make the required monthly
payments; otherwise the interest is accrued from the date of purchase. You missed the first payment due
date. The late fee is $35.00. How much is the interest?

Question

WILL MEDAL FOR RIGHT ANSWER

Your original purchase price was $950.00 plus 5% sales tax. You enter into an agreement where the
interest (12.5% APR) is waived for the first 12 months provided you make the required monthly
payments; otherwise the interest is accrued from the date of purchase. You missed the first payment due
date. The late fee is $35.00. How much is the interest?

camzzzie · Answer

I got to 950*1.05 is 997.5 but idk after that

anonymous · Answer

Alright, I am not sure about this, but I will give it a shot for you.   :D
The interest is 12.5% of your price. Without the late fee, we have 997.5 dollars as the price. So, your work is right. Take 12.5, divide it by 100, and multiply it by your price. Doing that gives you 124.69.....
If we put in the late fee, this gives us around 1032 dollars. Do the same process, and you get around 129 dollars. I hope this has helped. If I made a mistake, please let me know.    :D

anonymous · Answer

I agree with ags altough I got something a little different his seems to make more sense

triciaal · Answer

I would not compute interest on the late fee I would consider that "new purchase"
Simple Interest = principal * rate as % *  time in years
950(1.05) *0.125* 1