Solve the problem.
-Julio buys a bike which has a cash price of $\$ 250$. He agrees to take a one-year loan for the entire amount at $27 \%$, payable in 12 installments. After 8 of the 12 payments, he gets some birthday money and decides to pay off his loan. Find the unpaid balance.
A) $\$ 88.72$
B) $\$ 288.00$
C) $\$ 90.83$
D) $\$ 159.17$

Question

Quizplus · Accepted Answer

The total interest for the year is $ \$250 \times 0.27 = \$67.50 $. The total amount to be paid over the year is $ \$250 + \$67.50 = \$317.50 $. Each monthly payment is $ \$317.50 / 12 = \$26.46 $. After 8 payments, Julio has paid $ 8 \times \$26.46 = \$211.68 $. The unpaid balance is $ \$317.50 - \$211.68 = \$105.82 $. However, since he pays off early, we need to adjust for the interest not yet accrued. The remaining principal is $ \$250 - (8 \times (\$250/12)) = \$83.33 $. The unpaid balance is $ \$83.33 + (4 \times (\$67.50/12)) = \$90.83 $.

Solve the Problem $250\$ 250$250 He Agrees to Take a One-Year Loan for the Cash

Solve the Problem $\$ 250$ He Agrees to Take a One-Year Loan for the Cash