Question

WIL FANAND MEDAL

Answer 1

Kelsey and Cody want new living room furniture. They see a flyer in Sunday's newspaper for XYZ offering free money for 24 months (or so they think). At the store, they pick out a leather sofa and two ottomans. The sofa is $1,499 and each ottoman is $299. Are they eligible for the promotion with just those items? No, they have to make a minimum purchase of $2,399. So, in addition to the three-piece sofa set, they select a $249 coffee table and a $199 end table.

Kelsey and Cody have been making payments on this furniture for 18 months, but Cody gets laid off from his job and their income drops substantially. They are unable to stay current on their account even though they have paid $2,070 of the bill.

1.What is the total amount Kelsey and Cody financed, including $153 for tax and $75 for delivery?


2.According to the conditions stated in the disclosure statement, how much are their monthly payments?


3.If Kelsey and Cody do not send their payment in on time, what will the following month's payment be?


4.According to the disclosure terms, what happens to Kelsey and Cody's bill, including finance charges, when they get behind on their payments?


5.If you assume they are back-charged the increased finance rate from the beginning of the promotional period, how much will they owe in finance charges for the first year?


6.What is the minimum amount they would have saved if they paid cash? (hint: think about their original intended purchase)

Answer 2

So long question dear @Shadowdragon, just a min...

Answer 3

its a short scenario but the questions are what make it look so intimidating .

Answer 4

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Answer 5

thanks for the advice, but I'd rather stay on open study for the time being

Answer 6

that is 22222222222222222222222222 much

Answer 7

alright, i figured it out...

the question is so simple,
1. Kelsey and Cody want new living room furniture. They see a flyer in Sunday’s newspaper for XYZ, offering free money for 24 months (or so they think). At the store, they pick out a leather sofa and two ottomans. The sofa is $1,499 and each ottoman is $299. Are they eligible for the promotion (add up the sofa and two ottomans and compare to the above minimum purchase required)? Why or why not?



2. What do Kelsey and Cody have to do (like most consumers) to meet the terms of this promotion?


3. In addition to the three-piece sofa set above, Kelsey and Cody also purchase a $249 coffee table and $199 end table. What is the total amount financed, including $153 for tax and $75 for delivery (add the sofa, 2 ottomans, coffee table, end table, tax and delivery)?


4. According to the conditions above, what should their monthly payment be (Take your answer for #3 above and divide it by 24)? If Kelsey and Cody do not send their payment in on time, what will the following month’s payment be (Take the monthly payment and add the $37.50 charge as listed in the agreement)?


5. Kelsey and Cody have been making payments on this furniture for 18 months, but Cody gets laid off from his job and their income drops substantially. They are unable to stay current on their account, even though they have paid $2,070 of the bill. According to the above terms, what happens to their bill?


6. Which finance charge will apply to them (this is the default rate in the above agreement)?


7. Assume they are back-charged that rate from the beginning of the promotional period, how much will they owe in finance charges for the first year (take the amount financed in #3 and multiply by the rate in #6)?


8. What is the minimum amount they would have saved if they paid cash? (Hint, think about their original intended purchase...the answer for #3 - the answer for #1).


9. What are the pitfalls of using the 0% down for 24 months method that is often advertised (think of Best Buy, Sears, etc.)?

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Answer 8

@Shadowdragon Did you understand anything the way i solved ?

Answer 9

Sorta ...can you walk me through the process you used for numbers 1,3,and 6?

Answer 10

hi

Answer 11

@Koikkara

Answer 12

just check the comments in (*****)

Answer 13

close the Q

Answer 14

keep it 2 ur self