Question

Levi would like to use a credit card to make a $3000 purchase. He is considering two credit options. The first requires

Answer 1

Answer:

The amount of interest for this loan is 16.6%.

Step-by-step explanation:

Since Levi will make a purchase for $ 3000 with your credit card, you should explore the two options you have:

-On the one hand, a down payment of $ 1000, with fees of $ 125.

-on the other, a down payment of $ 1,300, with fees of $ 110.

In both cases, the fees are the same, and the interest too. Therefore, to determine the amount of installments and interest, the difference between the down payment of one option and the other must be taken and divided by the difference between the value of the installments of either option.

Thus, the difference of the down payment of 300 (1300 - 1000) must be divided by 15 (125 - 110). This yields a result of 20 (300/15), with which that will be the total of quotas until both have paid the same amount of money.

Thus, given that 1300 + 110 x 20 = 3,500, and that 1000 + 125 x 20 = 3,500, in both cases the total value to be paid is $ 3,500. Since 500 is 16.6% of 3000, the total purchase interest will be 16.6%.