Gen College Mathematics

Question 1: CONSUMER CREDIT

For big purchases, many stores offer a deferred billing option (buy now, pay later) that allows shoppers to buy things now without paying the bill at checkout.

1. Assume you bought new appliances for your newly renovated home.Based on the first letter of your last name, choose the total value of the appliances that you have purchased. This will be denoted byP. It does not necessarily have to be a whole number.

1. The store where you bought these appliances offered you a provision that if you pay the bill within 2 years, you will not be charged any interest for your purchases. However, if you are even a day late in paying the bill, the store will charge you interest for the 2 years.

   Although the annual interest rate is based on your credit worthiness, disregard this on this assignment and instead,choose an interest rate between 22% and 26%. This will be denoted byr.

1. Suppose you forget about the bill and pay it 1 day late. How muchinterest do you pay if the store charges yousimple interest? Because this is a dollar value, round your answer to the nearest cent. (Assumet= 2 years.)

2. How much is your total bill—the total value of the appliances plus the interest? Round your answer to the nearest cent.

3. How much is your total bill if, instead, the store charges you interest that is compounded daily? Use 6 digits on your intermediate calculations, and round your final answer to the nearest cent. (Assumet = 2 years.)