Question

. Jerry buys a $2,700 motorcycle on a deferred payment plan. there is no down payment and no interest foreighteen months. jerry must make a minimum payment of $75 a month. to avoid a retroactive apr of 21%, hemust pay the balance in full before the 18 months has passed. if he pays $75 each month, how much should hepay the last month to avoid the interest charges?

Answer 1

The answer to your question is seen below.

To avoid paying the retroactive APR of 21% he will pay if cannot pay on time, Jerry’s last month payment must be $ 1,425.

Hope my answer would be a great help for you.

Answer 2

In last month, Jerry should pay $1425

Explanation:

Cash price for the motorcycle = $2700

Minimum Payment that is to be made each month = $75

Time after which interest will be charged = 18 months

So, to find the last payment which is to be made at 18th month , we need to find the total amount paid till 17 months which is = 17 × Monthly Payment

= 17 × 75 = $1275

So, the remaining amount which is to be paid in 18th month to avoid interest charges = 2700 - 1275 = $1425