John bought a used truck for $4,500. he made an agreement with the dealer to put $1,500 down and make payments of $350 for the next 10 months. the extra cost paid by taking this deal is equivalent to what actual yearly rate of interest?
a. 36%
b. 63%
c. 33%
d. 3.6%

A. 36% is the answer.

Step-by-step explanation:

Price of the used truck = $4500

Down payment = $1500

Money left to be paid = dollars.

Now we have pv = $3000

p= $350

n = 10

Using the annuity formula:

Putting the values in formula we get;

Solving this equation we get

r = 2.9% ≈ 3%

So, annual interest will be %

Hence, option A is the answer.