Ask Question
1 August, 18:39

Mason has an offer to buy an item with a sticker price of $14,800 by paying

8530 a month for 36 months. What interest rate is Mason being offered?

A 12.8%

B. 25.7%

C6.4%

d8,5%

+4
Answers (2)
  1. 1 August, 18:44
    0
    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%
  2. 1 August, 18:48
    0
    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%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Mason has an offer to buy an item with a sticker price of $14,800 by paying 8530 a month for 36 months. What interest rate is Mason being ...” in 📗 Mathematics if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers