Problema Solution
Sonia purchased a pool for $2,150 using a six-month deferred payment plan. The interest rate after the introductory period is 27.99%. No down payment is required, but there is a minimum monthly payment of $35. What is the balance at the beginning of the seventh month if only the minimum payment is made each month during the introductory period?
Answer provided by our tutors
since no interest is charged during the introductory period,
simply 2150 - 6*35 = $1940
35 * 6= 210 in payments made
A= P( 1 +r/n)^(n*t)
A = 2150( 1 + 0.2799/12)(12*.5) = 2468.99 amount deferred
2468.99 - 210 paid = $2258.99
Most deferred payment plans charge the interest from date of purchase, it is NOT applied to the loan as long as it is paid off before the end of the deferred period.