Sarah bought a lawn more 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 costs paid by taking this plan is equivalent to what actual yearly rate of interest?

Question

Mathematics

Hannah

20 December, 16:17

Sarah bought a lawn more 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 costs paid by taking this plan is equivalent to what actual yearly rate of interest?

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Answers (1)

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Zachariah Jacobson · Answer 1

100+25*12=

100+300=

400

400-320=80

I=PRT

I=80

P=principal=320

T=1 year

R=?

80=320*1*?

80=320?

divide both sides by 320

0.25=?

that is 25%

answer is 25%