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what was paid on this item?
donna bought a new kitchen set at lowes. donna paid off after 60 days with an interest charge of $9.00. If lowes charges 8.5% interest, what did donna pay for the kitchen set (assume 360 days not 365 in a year)?
thank you for the help
2 Answers
- LaurenceLv 41 decade agoFavorite Answer
assume lowes charges interest from day one and compounds monthly
P((1+.085/12)^2-1)=9
P=$633.05
you mentioned days a lot. maybe they compound interest daily?
then P((1+.085/360)^60-1)=9
and P=$630.88
- Jun AgrudaLv 71 decade ago
Price of the kitchen set:
= $9/(0.085[60/360])
= $9/(0.085[1/6])
= $9/(17/1,200)
= $9(1,200/17)
= $10,800/17 or $635.29
Amount she paid for the kitchen set:
= $635.29 + $9
= $644.29
Answer: $644.29
Proof (interest charge, $9):
= $635.29 * 0.085 * 60/360
= $9
