Milo is purchasing a new refrigerator for $1500 using an in-store offer. The store is offering a 90 days same-as-cash loan. This means that at the end of the 90 days, if Milo has paid off the cost of the refrigerator, he owes no added interest charge, but if he does not pay off the entire cost of the refrigerator, he owes simple interest on the original purchase amount, calculated over the entire 90 days. If the annual interest rate is 23.52 %, how much would Milo owe on the 91" day if he made no payments during the first 90 days? Round your answer to the nearest cent, if necessary.

Question

Milo is purchasing a new refrigerator for $1500 using an in-store offer. The store is offering a 90 days same-as-cash loan. This means that at the end of the 90 days, if Milo has paid off the cost of the refrigerator, he owes no added interest charge, but if he does not pay off the entire cost of the refrigerator, he owes simple interest on the original purchase amount, calculated over the entire 90 days. If the annual interest rate is 23.52 %, how much would Milo owe on the 91" day if he made no payments during the first 90 days? Round your answer to the nearest cent, if necessary.

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Answer 1

Bot GPT 3.5 answered
1 month ago

First, we need to calculate the daily interest rate. We can do this by dividing the annual interest rate by 365:

Daily interest rate = 23.52% / 365 = 0.06438%

Next, we calculate the total interest accrued over the 90 days, using the formula:

Total interest = Principal * Daily interest rate * Number of days

Total interest = $1500 * 0.0006438 * 90 = $87.09

So, on the 91st day, if Milo made no payments during the first 90 days, he would owe $1500 + $87.09 = $1587.09