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. (7 points: Part I - 1 point; Part II - 1 point; Part III - 1 point; Part IV - 1 point; Part V - 1 point; Part VI - 1 point; Part VII - 1 point) Part I: What is the total amount of money that Tyrone paid? Part II: How much money did Tyrone pay in interest? Part III: What was the markup rate on Tyrone's sofa? Round your answer to two decimal places. Part IV: What is the total amount of money that Terri paid? Part V: How much money did Terri pay in interest? Part VI: What was the markup rate on Terri's sofa? Round your answer to two decimal places. Part VII: Who paid the higher markup rate, Tyrone or Terri?

Answer 1

Part I: Tyrone paid a total of $74 * 24 = $1776 for the sofa.

Part II: Tyrone paid $1776 - $1350 = $426 in interest.

Part III: The markup rate on Tyrone's sofa is ($426 / $1350) * 100 = approximately 31.56%.

Part IV: Terri paid a total of $52 * 24 = $1248 for the sofa.

Part V: Terri paid $1248 - $950 = $298 in interest.

Part VI: The markup rate on Terri's sofa is ($298 / $950) * 100 = approximately 31.37%.

Part VII: Tyrone paid a slightly higher markup rate compared to Terri, so Tyrone paid the higher markup rate for the sofa.