A store offers customers two ways to pay for a new TV. Option 11: Pay $1,500$1,500 today. Option 22: Pay nothing today, and take out a simple interest loan to pay a total of $1,650$1,650 one year from now. What is the simple interest rate on the loan in option 22?
Let's solve for the simple interest rate on the loan in option 2. We formulate an equation by enumerating the following: Option 1: If the customer pays today, the amount needed is only $1500. Option 2: If the customer pays after 12 months, the total amount is $1650. The equation is $1500+ ($1500x%charge) =$1650. Solve for % charge after 12 months, %charge = ($1650-$1500) /$1500 %charge =0. 1 or 10%
Therefore, the percent charge after 12 months is 10%.
