In the standard compound interest formulas, the payment is made at the end of the month.
So I will consider today's payment to be a down payment.
Balance owing = 38500-690 = 37810
let the monthly rate be i
the number of payments = 68
690( 1 - (1+i)^-68)/i = 37810
There is no easy algebraic way to solve that type of equation.
I will use Wolfram to get it, I switched my i to x to avoid confusion with
complex numbers.
Wolfram said: the monthly rate is .00651317
so the annual rate compounded monthly is .07815804 or 7.82%
You have arranged for a loan on your new car that will require the first payment today. The loan is for $38,500, and the monthly payments are $690.
If the loan will be paid off over the next 69 months, what is the APR of the loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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