Short Answer 
The calculation involves determining total costs for borrowing, which includes the amount borrowed and additional fees, totaling $22,663. After calculating the after-tax income to be $4,910, the interest percentage is derived by subtracting this from the total repayment and dividing by the total repayment amount, resulting in an interest percentage of 16.70%.
Step 1: Understanding the Calculation of Total Amounts
Start by determining the important total amounts involved in the finance scenario. In this case, you will need to calculate the total costs associated with borrowing. This includes:
- Direct amount borrowed: $21,450
- Additional fees: $1,089
- Other costs: $124
Sum these values to find the overall amount that needs to be repaid, which equals $22,663.
Step 2: Determining After-Tax Income
Next, compute the actual after-tax income that will be available for repayment. This requires applying the tax deductions to the income amount, as shown below:
- Multiply the total income: $6,591 by 80%.
- Subtract the tax: Apply 6.88% tax rate.
The resulting after-tax amount gets you a figure of $4,910.
Step 3: Calculating Interest Percentage
Finally, to find the interest percentage, you need both the interest amount and the total repayment amount. First, compute the interest paid:
- Calculate total repayment over 3 years: $592 per month for 36 months, totaling $21,312.
- Subtract the after-tax income from total repayment: $22,663 – $4,910 = $17,753.
- Now determine the percentage: Divide the interest amount $3,559 by the total repayment $21,312 and multiply by 100 to get 16.70%.
This results in an interest percentage of 16.70%. Hence, that would be the correct option to consider.