uestion 9 of 15, Step 1 of 1 Milo is purchasing a new refrigerator for \( \$ 3600 \) 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 \( 23.99 \% \), how much would Milo owe on the 91 sit day if he made no payments during the first 90 days? Round your answer to the nearest cent, if necessary.
Real Tutor Solution
Answer
Solution
Reviewed and approved by the UpStudy tutoring team
Explain 
Simplify this solution Mind Expander
To find out how much Milo would owe on the 91st day if he made no payments during the first 90 days, we first need to calculate the simple interest for that period. The formula for simple interest is \[ I = P \times r \times t \] where \(P\) is the principal amount (the cost of the refrigerator), \(r\) is the annual interest rate (as a decimal), and \(t\) is the time in years. 1. The principal \(P\) is \(3600\). 2. The annual interest rate \(r\) is \(23.99\% = 0.2399\). 3. The time \(t\) is \(90\) days, which is \(\frac{90}{365}\) years. Now, plug in the values: \[ I = 3600 \times 0.2399 \times \frac{90}{365} \] Calculating \(I\): \[ I \approx 3600 \times 0.2399 \times 0.24657534 \approx 3600 \times 0.05907378 \approx 212.052 \] So the interest accrued in 90 days is approximately \(212.05\). To find the total amount owed on the 91st day, add the interest to the principal: \[ Total = Principal + Interest = 3600 + 212.05 = 3812.05 \] Thus, if Milo made no payments during the first 90 days, he would owe approximately **$3,812.05** on the 91st day.
