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Sarah bought a lawnmower for $320. She signed up for the buy now pay later plan at the store with the following conditions: $100 down and payments of $25 for the next 12 months. The extra cost paid by taking this plan is equivalent to what actual yearly rate of interest? A. 85%

B. 65%
C. 67%
D. 25%
Student Answer: D
Answer: Incorrect

User Sierra
by
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2 Answers

7 votes

100 down+25 x 12 months
100+25 x 12
100+300
400

400-320=80

find percent increase since it is 1 year
80/320=8/32=4/16=2/8=1/4=0.25/1

100
0.25/1 times 100/100=25/100=25%

So, Our answer is D
User Reefaq
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7.8k points
3 votes
The correct answer is C. 67%
User Luke Sleeman
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8.2k points