How to Calculate Percent Increase in Price Using a Payment Plan
What is the percent increase from the original cost of the entertainment system to the cost of the entertainment system using the payment plan?
Frank wants to buy an entertainment system that costs $500, including taxes. To pay for the entertainment system, he will use a payment plan that requires him to take a down payment of $125, and then pay $72.50 each month for 6 months.
Answer
The percent increase from the original cost of the entertainment system to the cost of the entertainment system using the payment plan is 12%.
Hi, to answer this question, first we have to obtain the price paid using the payment plan:
- Downpayment: $125
- $72.50 each month for 6 months: 72.50 x 6 = 435
Cost using payment plan: 125+435=560
Original cost: $500
If we compare the price by applying the formula:
Percentage increase = (higher value - lower value)/lower value x 100
Replacing with our values:
P = (560-500/500)x100 = 0.12 x 100 = 12%
Feel free to ask for more if needed or if you did not understand something.