Stereo Inc. sells a stereo system for $300 down and monthly payments of $80 for the next 3 years. If the interest rate is 3.25 % per month, what is the cost of the stereo?

Are you sure the interest is 3.25% per month? That is 39% per year. Maybe you mean 3.25% per year?

To calculate the cost of the stereo, we need to consider the initial down payment and the monthly payments over the specified period, taking into account the interest rate.

1. First, let's determine the total amount paid in monthly payments over the next 3 years. Since there are 12 months in a year, the total number of months is 3 years * 12 months/year = 36 months.
Monthly payment for the stereo system = $80
Total monthly payments over 3 years = $80/month * 36 months = $<<80*36=2880>>2880

2. Next, let's calculate the total amount paid, including the down payment and the monthly payments.
Down payment = $300
Total amount paid = Down payment + Total monthly payments
= $300 + $2880
= $<<300+2880=3180>>3180

3. Now, we need to calculate the interest for each month and add it to the total amount paid. The interest rate is given as 3.25% per month, which needs to be converted to a decimal value of 0.0325.
Interest per month = 0.0325 * Total amount paid
Total amount with interest = Total amount paid + (Interest per month * Number of months)

Plugging in the values:
Interest per month = 0.0325 * $3180
= $103.35

Total amount with interest = $3180 + ($103.35 * 36)
= $3180 + $3722.6
= $<<3180+3722.6=6902.6>>6902.6

Therefore, the cost of the stereo system, taking into account the down payment, monthly payments, and the interest rate, is approximately $6902.6.