A one-year subscription to a magazine costs $15. A three-year subscription is $37.50. What interest rate is the magazine offering for early payment
50%
To find the interest rate offered for early payment, we can compare the total cost of the one-year subscription with the total cost of the three-year subscription.
Let's start by calculating the cost of one year: $15.
Next, we will calculate the total cost of the three-year subscription: $37.50.
Now, let's find the difference between these two costs:
Total cost of three-year subscription - Total cost of one-year subscription
$37.50 - $15 = $22.50
The $22.50 difference represents the interest gained from early payment for three years.
To calculate the interest rate on early payment, we need to divide the interest gained by the one-year subscription cost and then multiply by 100 to convert it to a percentage.
Interest rate = (Interest gained / Cost of one-year subscription) * 100
Interest rate = ($22.50 / $15) * 100
Interest rate = 150%
Therefore, the magazine is offering an interest rate of 150% for early payment.