Henry Devine bought a new dishwasher for $320. He paid $20 down and made 10 monthly payments of $34. What actual yearly interest rate did Henry pay?

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Answer 1 · 2018-06-27T06:09:37

Rate of Interest #=15%#

The price of Dishwasher #=$.320#
Down payment #=$.20#
Monthly payment #=$.34#
Number of instalments #=10#

Amount paid by the customer = Downpayment + [Monthly payment #xx# number of instalments]

#=20+ [34 xx 10]#

#=20+340=360#

Interest #=360-320=40#

Rate of interest #r=(i xx 100)/(P xx n)#

#i=# Interest
#P=# Principal
#n=# Number of years

#r=(40 xx 100)/ (320 xx 10/12)=4000/(266 2/3)=15%#

Rate of Interest #=15%#