Allison puts $250 down and following that she makes 12 monthly payments of $124.49. The sum of her payments (total cost) is thus $250 + (124.49/month)(12 months) = $1743.88
The total interest she pays is $1743.88 - ($124.49/month)(12 months), or
$250
We use the simple interest formula: i = prt, where t is the number of years, and r is the interest rate as a decimal fraction:
$250 = $1599.99*r*1.
$250
Solving this for r by division, we get r = --------------- = 0.1463, or approx 15%
