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Rent-A-Center advertises an Amana refrigerator for $\$95.30$ per month.

The actual cost of the refrigerator is $\$787.50$.

The advertised payment plan cost is $\$1810.70$ (disregarding taxes and promotional offer).

The annual interest rate is $122.22\%.$

You would be paying $\$1023.20$ in interest.

Alternatively, it would take $9$ month of saving $\$95.30$ per month in order to afford the refrigerator at the original price of $\$787.50.$

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import math r=1+((((95.3*19)/787.5)-1)/12) def newton(c, d, r, n, err): i=0 while abs(c(r)) > err and i <=n: r=r-c(r)/d(r) i+=1 print(r) if i > n: return False else: return r def rate(r): return 787.5*r**(19+1) - (787.5+95.3)*r**19 + 95.3 def rate_deriv(r): return 787.5*(19+1)*r**19 - (787.5+95.3)*19*r**(19-1) print('\nAnnual interest rate: ', round(12*(newton(rate, rate_deriv, r, 4, 0.0001)-1)*100, 2), '% \n') print('Actual cost of refrigerator: $787.50 \n') print('Price paid after 19 monthly payments of $95.30: $', 19*95.3, '\n') print('Total interest paid: $', (19*95.3)-787.5, '\n') print('Time it would take to save $95.30 per month in order to afford the refrigerator: ', math.ceil(787.5/95.3), 'months \n')

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1.1026197834115743
1.1018634692604634
1.1018508808927683
Annual interest rate: 122.22 %
Actual cost of refrigerator: $787.50
Price paid after 19 monthly payments of $95.30: $ 1810.7
Total interest paid: $ 1023.2
Time it would take to save $95.30 per month in order to afford the refrigerator: 9 months