Purchase price of article = $3,000
Down payment = $0
Number of payments = 36
Monthly payment amount=$93.33
True Annual Interest (to the nearest tenth) = a0 %
93.33 * 36 = 3,359.88
359.88/3000 = 0.11996 = 12.0%
To find the True Annual Interest (to the nearest tenth), we can use the formula for calculating the annual interest rate from the monthly payment:
True Annual Interest = [(Monthly Payment / Purchase Price) * (Number of Payments / 12)] * 100
Let's plug in the given values:
Monthly Payment = $93.33
Purchase Price = $3,000
Number of Payments = 36
True Annual Interest = [(93.33/3000) * (36/12)] * 100
Simplifying the equation:
True Annual Interest = (0.03111 * 3) * 100
True Annual Interest = 9.333
Rounding to the nearest tenth, the True Annual Interest is 9.3%.