Question

Furniture Store Credit Card Disclosure Statement: On approved furniture store credit card purchases—based on your credit worthiness, other terms may apply. $2,399 minimum purchase required for this offer. Other finance offers available with lower minimum payment requirements. The purchase amount is divided into equal monthly payments for the promotional period. An additional $37 will be added to the following month’s payment when payment is received after the due date. No finance charges for 24 months. 23.9% standard rate, APR. The promotion is cancelled for accounts not current, and the default rate of 25.9% and regular minimum monthly payments apply. Minimum finance charge $2. Certain rules apply to the allocation of payments and finance charges on your promotional purchase if you make more than one purchase on your credit card. Call 1-800-123-4567 or review your cardholder agreement for information. Sale items and clearance items excluded. Offer does not apply to previous purchases and cannot be combined with other discounts.

You buy a sofa for $1499, 2 chairs (each at $299),$249 coffee table,$199 end table, $153 for tax, $75 for delivery. If you miss a payment and you disqualify your purchase from the promotion, what would be the interest cost for one year? Round to the nearest cent.

Answer 1