Based on the problem, here are the given data:
Price of the Laptop = $884.69 including tax.
Monthly Payment = $31.30
Time = 5 years = 60 months
Therefore, by the end of 5 years, Emilie will have paid $1,878.
[tex]\begin{gathered} FutureValue(A)=31.30\times60 \\ A=1,878 \end{gathered}[/tex]Therefore, the interest added to the original price is $993.31.
[tex]\begin{gathered} \text{Interest}=A-P \\ \text{Interest}=1,878-884.69 \\ \text{Interest}=993.31 \end{gathered}[/tex]So, (assuming simple interest)
interest = 993.31
Principal = 884.69
time = 5 years
To get the interest rate, we have the formula below:
[tex]r=\frac{I}{Pt}[/tex]Let's substitute the values that we have to the formula above.
[tex]\begin{gathered} r=\frac{993.31}{(884.69)(5)} \\ r=\frac{993.31}{4423.45} \\ r=0.22456 \end{gathered}[/tex]Therefore, the interest rate is 22.5%.
