Ella has an offer to buy an item with a sticker price of $12,300 by paying $420 a month for 36 months. What interest rate is Ella being offered?

6.9% APEX

18.65%

Explanation:

Cost = $12,300

Total Payment = $420 * 36

= $15,120

Difference in the cost and payment = $15,120 - $12,300 = $2,820

Interest rate is the ratio of the interest to the original cost of the item.

The interest is the difference between the amount paid and the actual cost.

Interest rate = ($2,820/$15,120) * 100%

= 18.65%