Your parents' original purchase price was $1,550.00 plus 7.25% sales tax. They enter into an agreement where the interest (11.75% APR) is waived for the first 12 months provided they make the required monthly payments; otherwise the interest is accrued from the date of purchase. They miss the first payment due date. The late fee is $29.00. How much is the interest?

Question

Garrett Tanner

Mathematics

12 March, 03:23

Your parents' original purchase price was $1,550.00 plus 7.25% sales tax. They enter into an agreement where the interest (11.75% APR) is waived for the first 12 months provided they make the required monthly payments; otherwise the interest is accrued from the date of purchase. They miss the first payment due date. The late fee is $29.00. How much is the interest?

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Houston Washington · Answer 1

The interest due to the late payment will be = $195.33 (A)

Step-by-step explanation:

original purchase price = $1550

sales tax = 7.5%

APR (annual percentage rate) = 11.75%

late fee = $29.00

the Apr is the interest charged yearly and it is charged on the principal amount (original amount) of the property

The APR on the original purchase will be

11.75% of $1550 = $182.13

from this question the monthly payment of the APR will be

= $182.13 / 12 = $15.18

hence the total interest accrued/paid from the first month due to late payment is = APR payment + late fee

= $182.13 + $29 = $211.13