At first you need to know total cost [tex](875)(1.05) = 918.75[/tex]
According to the fact that you have already paid for 7 months, we have to substract [tex] 700 = 218.75[/tex] ---> what still needs to be payid.
On the 8 moth you have missed the payment so (218.75)(8/12), and remaining moths are nearly 145.83333
To finish, multiply by the apr and you will get $20.78 interest charged. So, I am pretty sure that he answer is D.
