Question

Tyrone and Terri both bought sofas with installment loans. Tyrone bought a sofa with a

sticker price of $1350 by paying $74 a month for 24 months, while Terri bought a sofa with
a sticker price of $950 by paying $52 a month for 24 months. Both Tyrone and Terri hate
paying interest, so they're trying to find out who paid the higher markup rate. Help them
figure out the answer. ​

Answer 1

Tyrone paid the higher markup rate.

Explanation:

Tyrone and Terri both bought sofas with installment loans.

Tyrone bought his own with a sticker price of $1350 by paying $74 a month for 24 months. Therefore,

74 × 24 = $1776

The mark up = $1776 - $1350 = $426

Tyrone markup rate = 426/24 = $17.75 per month

Terri bought his own with sticker price of $950 by paying $52 a month for 24 months. Therefore,

52 × 24 = $1248

mark up = $1248 - $950 = $298

Terri markup rate = 298/24 = $12.4166666667 = $12.42 per month