Question

9. Noel Devine bought a new dishwasher for $320. He paid $20 down and made 10 monthly payments of $34. What actual yearly interest rate did Noel pay?

Answer 1

Amount financed
320-20=300
Total paid
34×10=340
Interest
340-300=40
Interest rate
((2×12×40)÷(300×11))×100
=29.09%

Hope it helps

Answer 2

Actual yearly interest paid by Noel = 14.55 %

Explanation:

Price at which Noel bought the dishwater = $320

Amount of Down payment paid by Noel = $20

Left out amount to be paid by Noel = 320 - 20 = $300

Number of monthly payment to be made = 10

Amount which is paid by Noel for each monthly payment = $34

Total amount paid by Noel = Down payment + Total monthly payment

= 20 + 34 × 10

= $360

Amount of Interest paid by Noel = 360 - 320

= $40

So, The Principal value of the interest is $300

Time = monthly payment months + 1 ( This is the month in down payment is made)

Time = 11 months

`\text{Time in years = }(11)/(12)\:\:years\\\\\implies Rate = (interest)/(Principal* Time)* 100\\\\\implies Rate=(40)/(300*(11)/(12))* 100\\\\\implies Rate = 14.55\%`

Actual yearly interest paid by Noel = 14.55 %