Question
Find the APR to the nearest half percent
Amount financed: $2000
Finance charge: $366.20
Number of months payments:48
Amount financed: $2000
Finance charge: $366.20
Number of months payments:48
Answers
oobleck
assuming simple interest, I = Prt, we have
2000*48*r = 366.20
r = 0.003815
That is the rate per month. The annual rate is 12 times that, or
0.0458 = 4.58%
If compound interest, solve for the annual interest r in
2000((1 + r/12)^48 - 1) = 366.20
2000*48*r = 366.20
r = 0.003815
That is the rate per month. The annual rate is 12 times that, or
0.0458 = 4.58%
If compound interest, solve for the annual interest r in
2000((1 + r/12)^48 - 1) = 366.20