Asked by CC
                A company borrowed $1500. It must make monthly payments of $40.50 for 42 months to pay off the loan. Use the constant ratio formula to find the annual percentage rate.
            
            
        Answers
                    Answered by
            Anonymous
            
    The Constant Ratio Formula for APR
APR ¡Ö 2NI
P(T +1)
where
N = number of payments per year (usually 12 since most loans are paid back in monthly payments)
I = finance charge (i.e., total interest plus any additional charges)
P = principal
T = total number of payments
42 pmts x $40.50 = total pd back $1701.
Loan is for $1500, the interest is $1701 - $1500 = $201
APR = 2(12)(201)
1500 (42+1)
= 4824 = 0.07479
64500
= 7.48 %
    
APR ¡Ö 2NI
P(T +1)
where
N = number of payments per year (usually 12 since most loans are paid back in monthly payments)
I = finance charge (i.e., total interest plus any additional charges)
P = principal
T = total number of payments
42 pmts x $40.50 = total pd back $1701.
Loan is for $1500, the interest is $1701 - $1500 = $201
APR = 2(12)(201)
1500 (42+1)
= 4824 = 0.07479
64500
= 7.48 %
                                                    There are no AI answers yet. The ability to request AI answers is coming soon!
                                            
                Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.