227.5( 1- (1+i)^-60)/i = 9500
You will need some "fancy" methods to solve this type of an equation, e.g. Newton's Method
I just ran it through Wolfram and got
i = .0127495 for a monthly rate or an annual rate of appr . .152994 or
appr 15.3% per annum compounded monthly
http://www.wolframalpha.com/input/?i=solve+227.5(+1-+(1%2Bx)%5E-60)%2Fx+%3D+9500
Using the formula, compute the true annual interest rate.
Loan amount = $9,500
Monthly payments = $227.50
Time of loan contract = 5 years
True annual interest rate (to the nearest tenth) = _____.
1 answer
1 answer