Problem

Compound Interest A national electronics retailer offers a promotion of no interest...

Compound Interest A national electronics retailer offers a promotion of no interest for six months if the minimum payment is made each month and the entire amount is paid within the six-month period. If any of the terms of payment are not satisfied, interest will accrue at 18% compounded monthly. You purchase a home theater system with 60-inch HDTV for $2,999.99.

a. If you satisfy the terms of the purchase, how much interest will you pay?

b. What is the APR?

c. What is the APY?

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Solutions For Problems in Chapter 1.6