Answer:
To calculate the percent increase in the amount of interest paid between a household with a 740 credit score and one with a 730 credit score , we need to find the total amount paid for each score and then calculate the percent increase.
From the given table , we can see that the simple interest rate for a credit score of 740-799 is 15%, and the total number of payments is 33 . So, the total amount paid for a principal balance of $18,000 with a credit score of 740 is:
Principal + Total Interest = Total Amount Paid
$18,000 + ($18,000 * 15% * 33/12) = $20,700
Similarly, for a credit score of 730, we need to use the simple interest rate for a credit score of 670-739 , which is 18%, and the total number of payments is 38. So, the total amount paid for a principal balance of $18,000 with a credit score of 730 is:
Principal + Total Interest = Total Amount Paid
$18,000 + ($18,000 * 18% * 38/12) = $21,240
Now, to calculate the percent increase in the amount of interest paid , we can use the following formula:
Percent increase = |(New value - Old value) / Old value| * 100%
Plugging in the values, we get:
Percent increase = |($21,240 - $20,700) / $20,700| * 100%
Percent increase = 2.6%
Rounding to the nearest tenth, we get the final answer as:
Percent increase = 2.6% ≈ 2.5% (rounded to the nearest tenth)
Therefore, the answer is O 2.5%.
Explanation: