487.54 * 36 = 17,551.44
17,551.44 - 15,000 = 2,551.44 interest
2,551.44 / 3 = 850.48
850.48 / 15,000 = 0.0566986 = 5.67% APR
Alfred Juarez paid off a 15,000 car lon over3 years with monthly payments of $ 487.54 each. Find the finance charge and the APR
2 answers
Ms Sue, this has to be done with compound interest
15000 = 487.54( (1+i)^-36)/i
tough to solve ...
I ran it through the Wolfram equation solver and got
i = .00875 per month
so the annual rate is 12(.00875) = .105 = 10.5%
check:
if rate is 10.5%
then i = .105/12 = .00875
PV = 487.54 (1 - 1.00875^-36)/.00875
= 15000.10 , not bad
15000 = 487.54( (1+i)^-36)/i
tough to solve ...
I ran it through the Wolfram equation solver and got
i = .00875 per month
so the annual rate is 12(.00875) = .105 = 10.5%
check:
if rate is 10.5%
then i = .105/12 = .00875
PV = 487.54 (1 - 1.00875^-36)/.00875
= 15000.10 , not bad