Answer:
8.83%
Step-by-step explanation:
Using compound interest formula
A = P ( 1+ r) ^t where A = amount = 530 × 36 = $ 19080, P = the amount of the loan = $ 14800, t = 36 / 12 = 3 years
substitute the values into the equation
19080 = 14800 (1 + r) ^3
19080 / 14800 = (1 + r) ^3
1.2892 = (1 + r) ^3
∛(1.2892) = 1 + r
1.0884 = 1 + r
r = 1.0884 - 1 = 0.0884 × 100 = 8.83%
Answer:
d 8,5%, the most probable, provided the error in the question is confirmed!!!
Step-by-step explanation:
Mason has an offer to buy an item with a sticker price of P= $14,800.
He is to pay $8530 a month for 36 months.
Total amount paid by Mason will be
$8530*36= $307,080
This will be very outrageous compared to the sticker price!!!
If we presume he is paying yearly 8530 for 36 months or 3 years.
Then total amount paid will be 8530*3 = $25590
Also very high in my opinion.
Perhaps the dollar sign was wrongly typed as '8' in the question and he pays only $530 monthly,
Then the total amount paid will be $19,080
This is quite reasonable.
If the interest rate is compounded for n (n=3, 36 months = 3 years)
years, thus
19080= ((P*(1+i)^n) , meaning
19080 =((14800(1+i)^3), which when evaluated yields
i=8.8%
