The extended warranty on a $960 dishwasher is 21% of the purchase price and lasts for eight years. What is the effective cost per year of the extended warranty?

First find the total warranty cost: 21% of $960 is 0.21 × $960 = $201.60. Divide that cost by the eight years of coverage: $201.60 ÷ 8 = $25.20 per year. The correct choice is $25.20.

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