Assignment $1\mathrm{.}3$: Credit Payment Calculations $($continued$)$

Frederick Easton Edison purchases a television from Company F on August $15.$ He

can either pay for the television set at the time of purchase, or purchase it on the

company's buy$-$now, pay$-$later plan. He chooses to purchase it on the company's buy$-$

now, pay$-$later plan.

On the buy$-$now, pay$-$later plan, the price is $$1995\mathrm{.}95($plus taxes$).$ At the time of

purchase, Frederick must pay the taxes and a $$40$ administration fee. He has one

year to pay for his purchase. If he pays during this time period, he will not be

charged interest. After one year, Company F charges customers $2\mathrm{.}25\%$ simple interest

per annum, charged monthly, on any outstanding amount. Assume that he is

charged interest from the date of purchase on the outstanding amount.

How much will Frederick pay for the television if he pays the entire amount on

September $15$ of the following year? $(5$ marks$)$