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 $=15%$