Question

14. 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%
CC. 67%
D. 25%

Answer 1

D

Explanation:

100+25 * 12 ; 100+300 = 400 ; difference = 400-320=80 ; percent increase since it is 1 year = 80/320 =1/4=0.25 = 25/100=25%