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April 20, 2014

Homework Help: Finance

Posted by Antoinette on Sunday, March 18, 2007 at 11:47pm.

Loan Payments - If you take out an $8,000 car loan that calls for 48 monthly payments APR of 10 percent, what is your monthly payment? What is the effecgive annual interest rate on the loan?

the montly rate is 0.10/12=.0083333...

then 8000= payment[1-(1.0083333)^-48]/0.00833333

solving this I got payment = 202.90

let the annual rate be j

then (1+j)^1=1.00833333^12
1+j=1.1047131
j=0.1047..
or the effective rate is 10.47%

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