A Simple Interest Question.
I apologise for the long question, but I need help "interpreting". I am looking for help concerning 1b.
1. Kevin wants to purchase household appliances worth $1800, $2400, and $900. Each appliance us offered to Kevin for 12 months interest free. He is charged a $25 application fee for each appliance as well as account-keeping fees of $2 per month for each of the three accounts.
a. If all three appliances are paid off within 12 months how much will Kevin have paid in total? (The answer here is $5247).
b. Kevin doesn't think he can pay off all three appliances in 12 months. If Kevins still owes $2000 in total at the end of the 12 months, what will this amount increase to if the interest rate is charged on the previous 12 months?
Am I supposed to calculate the interest for the $2000 owing or the $5247 from 1a?