Help please!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. 33% B. 36% C. 3.6% D. 63%

Answer: option A. 33%

Explanation:

1) Purchase price: $4500

2) Payments:

down: $1500
monthly: $350 * 10 = 3500

Total payments = $1500 + $3500 = $5000

3) Difference: $5000 - $3500 = $1500 = extra cost

4) Percent extra cost = (difference / purchase price) * 100 = ($1500/$4500)*100 = 33.3%