An electronics store advertises the following financing arrangement: “We don’t offer confusing interest rates. We just divide your total cost by 10 and you can pay that amount each month for one year.”
The first payment is made at the date of the sale and the remaining payments are made at the monthly anniversary thereafter for one year (with a total of 12 payments).
Assuming that the store allows (as many do) no repayment for the first year, what is the annual interest rate on the loan?