Question

Mason has an offer to buy an item with a sticker price of $14,800 by paying $530 a month for 36 months. What interest rate is Mason being offered?

A. 25.7%
B. 8.5%
C. 6.4%
D. 12.8%

Answer 1

To find the interest rate, subtract the sticker price from the total amount paid and divide by the sticker price. Mason is being offered an interest rate of approximately 28.97%.

Step-by-step explanation:

To find the interest rate, we need to determine the total amount paid over the 36 months. The total amount paid is the monthly payment multiplied by the number of months, which is $530 * 36 = $19,080.

We subtract the sticker price from the total amount paid to find the interest paid, which is $19,080 - $14,800 = $4,280.

Finally, we divide the interest paid by the sticker price and multiply by 100 to get the interest rate percentage: ($4,280 / $14,800) * 100 = 28.97%.

So Mason is being offered an interest rate of approximately 28.97%.