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Evelyn purchased a dining room set with a 12-month deferred payment plan. The interest rate on the plan was 25.57%. The dining room set must be paid off within two years after the deferment period. What is Evelyn's monthly payment after the deferment period if the price of the dining room set was $2,875 and she made no payments during the deferment period?

 Jan 4, 2017
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Provided the deferment period is interest free, then you have:

 

PV=P{[1 + R]^N - 1.[1 + R]^-N} R^-1=PV OF $1 PER PERIOD.

2,875 = P x {[1 + 0.2557/12]^(2*12) - 1 x [1 + 0.2557/12]^-(2*12) / (0.2557/12)}

2,875 = P x                                       18.63657

P =2,875 / 18.63657

P = $154.27 Evelyn monthly payment.

 Jan 4, 2017

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