We find the total amount he paid by 125+72.50(6), because he makes the payment of 72.50 for 6 months and has the down payment as well. 125+72.50(6) = 125+435 = 560. To find the percent increase that he pays compared to paying the $500 at once, we first find the amount of increase. 560-500 = 60. Now we divide the amount of increase by the original amount: 60/500 = 0.12 He pays an extra 12% by using the payment plan.
