Question 1066314: A store offers customers two ways to pay for a new TV.
Option 1
: Pay $1,500
today.
Option 2
: Pay nothing today, and take out a simple interest loan to pay a total of $1,650
one year from now.
What is the simple interest rate on the loan in option 2
?
Answer by Alan3354(69443)   (Show Source):
You can put this solution on YOUR website! A store offers customers two ways to pay for a new TV.
Option 1
: Pay $1,500
today.
Option 2
: Pay nothing today, and take out a simple interest loan to pay a total of $1,650 one year from now.
What is the simple interest rate on the loan in option 2?
---------
$1650 - $1500 = $150 interest
---
$150/$1500 = 10% per year
---
This is what is often called a "bad deal."
|
|
|
