Question

The cash price of a car is $32000. Tyson buys the car on terms. He pays 15% deposit and agrees to pay $680 every month for 4 years. What’s the yearly rate of simple interest?

Answer 1

Explanation:

Car price = $32000

15% of car price = $4800

rest of amount = 32000 - 4800

= $27200

Tyson pay $27200 with interest for 4 years

Total amount with interest which pays by Tyson for 4 years = $32640

Total amount of interest paid by Tyson = $32640 - $27200

= $5440 Ans.

total simple interest paid by Tyson for 4 years = (5440/27200)*100

= 20%

the yearly rate of simple interest = 20/4

= 5% Ans.