Mia Lane bought a high-definition television for $7,500. Based on her income, she could afford to pay back only $600 per month. There is 1 ½% monthly interest charge on the unpaid balance. The U.S. Rule is used in the calculation. At the end of month 1, the balance outstanding is:

Question

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The balance at the end of month 1 can be calculated by first adding the 1 ½% monthly interest charge on the unpaid balance of $7,500, which is $112.50 (7500 * 0.015). So, the new balance before payment is $7,612.50. After paying $600, the outstanding balance is $7,012.50, which is not listed among the options provided.

Mia Lane Bought a High-Definition Television for $7,500