math 4

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Henry Devine bought a new dishwasher for \$320. He paid \$20 down and made 10 monthly payments
of \$34. What actual yearly interest rate did Henry pay?
A. 29.09
B. 68.75End of exam
C. 14.55
D. 34.38

• math 4 -

Value of loan = \$300

let the monthly rate be i
then
34*(1- (1+i)^-10)/i = 300

hard to solve this type of equation but I have some methods and it gave me
i = appr .02343
so the annual rate compounded monthly is 28.1 %

check:
34(1 - 1.02343^-10)/.02343 = = 299.9988 , not bad I would say

None of your choices are valid using proper compound interest formulas

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