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Question

Jerry buys a $2,700 motorcycle on a deferred payment plan. There is no down payment and no interest for eighteen months. Jerry must make a minimum payment of $75 a month. To avoid a retroactive APR of 21%, he must pay the balance in full before the 18 months has passed. If he pays $75 each month, how much should he pay the last month to avoid the interest charges?

Answer

Well, class, to address the aforementioned inquiry, let me present to you the answer to your question as follows. In order for Jerry to steer clear of having to cough up a whopping 21% in retroactive APR fees, as a result of failing to make timely payments, he is going need to make a final payment of precisely $1,425 in the last month. I trust this response has offered the assistance you were seeking.