Henry Devine bought a new dishwasher for $320. He paid $20 down and made 10 monthly payments

Question

of $34. What actual yearly interest rate did Henry pay?
A. 29.09
B. 68.75End of exam
C. 14.55
D. 34.38
Please explain to me

Answer 1

Value of loan = $300

let the monthly rate be i
then
34*(1- (1+i)^-10)/i = 300

hard to solve this type of equation but I have some methods and it gave me
i = appr .02343
so the annual rate compounded monthly is 28.1 %

check:
34(1 - 1.02343^-10)/.02343 = = 299.9988 , not bad I would say

None of your choices are valid using proper compound interest formulas