Answer:
The difference between the cash price and the HP price is $3,657.8. The annual rate of interest paid on the HP plan is 11.74% per year.
Step-by-step explanation:
Given that a second-hand car is advertised for $ 15,575 cash or $ 1600 deposit and 24 monthly payments of $ 734.70, to determine what is the difference between the cash price and the HP price and what annual rate of interest is paid on the HP plan you must perform the following calculation:
(1600 + 734.70 x 24) - 15,575 = X
(1600 + 17,632.8) - 15,575 = X
19,232.8 - 15,575 = X
3,657.8 = X
Therefore, the difference between the cash price and the HP price is $ 3,657.8.
15,575 = 100
19,232.8 = X
19,232.8 x 100 / 15,575 = X
1,923,280 / 15,575 = X
123.48 = X
(123.48 - 100) / 2 = X
23.48 / 2 = X
11.74 = X
Therefore, the annual rate of interest paid on the HP plan is 11.74% per year.
