Question

Noel bought a new dishwasher for $320 he paid $20 down-and made 10 monthly payments of 34.00. What actual yearly interest rate did Noel?

Answer 1

find how much he payed in total

that is down+payments
down=20
payments=10 times 34=340

toal is 340+20=360

interest=payed-cost=360-320=40

the interest was 40

interest=principal times rate times time
time is in years
so 10 months
t=10/12 or 5/6
rate=r
principal=320
interest=40

40=320 times r times 5/6
40=800/3 time r
times both sides by 3/800
0.15=r
that is 15%

Answer 2

20 + (34*10) = 360

320-360=40

(40/320)*100 = 12.5

12.5 / 10 = 1.25

1.25 * 12 = 15%

Hope this helps! :)