Question 8 • Advanced Financial Algebra
Convert the 5% annual interest rate to a monthly rate: 0.05 ÷ 12 ≈ 0.004167. Rearrange the payment formula to find the purchase price: P = 225 × [1 − (1 + 0.004167)⁻³⁶] ÷ 0.004167 ≈ $7,490. The closest choice is $7,500, choice B.
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