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Financial Maths, STD2 EQ-Bank 20_3

Mei uses a buy now, pay later payment option to make a purchase of $1600. Her repayments are split across 4 equal payments over 6 weeks. No interest is charged.

Mei misses her final payment and is charged a late fee of $68. Mei's payment schedule is shown, with her balance totalling $468.
 

  1. Find the total amount Mei pays for her purchase if repaying in full on 28 September 2026.   (1 mark)
  2. Mei's bank offers short-term loans where simple interest is charged at 18% per annum.
  3. Suppose Mei had borrowed $1600 from the bank to make this purchase on 3 August 2026 and repaid it in full 9 weeks later.
  4. How much would Mei have saved using this approach instead of the buy now, pay later option?   (2 marks)
Show Answers Only

a.    \($1668\)

b.    \($18.29\)

Show Worked Solution

a.    \(\text{If total owing paid on 28 September:}\)

\(\text{Total paid} = 400+400+400+468=$1668\)
 

b.    \(r=18\%=0.18,\ \ n=\dfrac{9 \times 7}{365} = \dfrac{63}{365}\)

\(I=Prn=1600 \times 0.18 \times \dfrac{63}{365} = 49.709… = $49.71 \)

\(\text{Amount saved} = 68-49.71=$18.29\)