Question

I need help with this I keep putting the numbers in wrong on the formula ! PLEASE HELP
Price of article = $315.50

Down payment = $31.55

Monthly payment amount = $16.50

Duration of payments = 20 months

True annual interest rate to the nearest tenth = %

Formula: I(Interest)= 2YC/M(N+1)

y = payments per year; c = total interest paid; m = amount financed; n = total number of payments.

Answer 1

Let's figure it this way.

315.5 - 31,55 = 283.95 >> amount financed

16.5 * 20 = 330 >> amount paid

330 - 283.95 = 46.05 >> interest

46.05 / 283.95 = 0.16217 = 16.2% >> interest rate

Answer 2

Please ignore my previous post. I goofed!

I = PRT

46.05 = 283.95 * R * 1.6667

46.05 = 473.26R

46.04 / 473.26 = R

0.0972 = 9.7% = R