Bunuel wrote:
On a purchase of $120, a store offered a payment plan consisting of a $20 down payment and 12 monthly payments of $10 each. what percent of the purchase price, to the nearest tenth of a percent, did the customer pay in interest by using this plan?
A. 16.7%
B. 30%
C. 75.8%
D. 106.7%
E. 107.5%
Subtract the down payment. Find the difference between original amount owed and final amount paid. That's interest. Finally, find percentage required.
Purchase price = $120
Less the $20 down payment =
120 - 20 = $100 to pay off at beginning
Payment total at end is $10/month * 12 months = $120
She had $100 to pay at beginning. She paid $120 by the end.
The difference is interest: $120 - 100 = $20 in interest
$20 is what percent of purchase price $120?
\(\frac{20}{120}\) = \(\frac{1}{6}\) * 100 = 16.66... = 16.7%
Answer A
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