Assume you purchased a new home theater set for $3,000 on a “same as cash” 180-day deal. If you missed the 180-day deadline to pay off your balance and are charged 15% simple interest on the $3,000, how much do you owe?
15% simple interest means that you have to pay 15% of the loan in interest per year. 180 days is half of a year. Therefore, you would only have to pay half of 15% or 7.5%.
