Posted by **Jessie** on Sunday, January 16, 2011 at 2:17pm.

Cassandra is repaying an installment loan of 3,500 with 20 equal payments of 196.00 each.What is the annual percentage rate of the loan?

A. 7.55%

B.11.16%

c 12%

d.13.25%

- math -
**Reiny**, Sunday, January 16, 2011 at 3:43pm
The question is not worded very clearly.

Are the payments made monthly?

Is this a simple interest or compound interest problem?

None of the rates given as choices verify when considering compound interest

so assuming this is simple interest,

interest = 20(196) - 3500 = 420

rate = 420/((3500)(1))= .12 or 12%

- math -
**Jessie**, Sunday, January 16, 2011 at 4:53pm
Thank you,I put the question down just like it is in my book,I was confused also.I did come up with 12%,so hopefully it is right.Thanks again!

- math -
**helper**, Sunday, January 16, 2011 at 4:56pm
I = PRT

R = I/PT

I = 20(196) - 3500

I = 3920 - 3500

I = 420

T = 20 mo/12

T = 1.667 yr

R = I/PT

R = 420/(3500 * 1.667)

R = 420/5834.5

R = .071986

R = 7.2%

check

I = PRT

I = 3500 x 7.2% x 1.667 yr

I = 252 x 1.667

I = 420.084

I am not a tutor

## Answer This Question

## Related Questions

- math - Cassandra is repaying an installment loan of $3,500 with 20 equal monthly...
- Business Math - Cassandra is repaying an installment loan of $3,500 with 20 ...
- Business Finance - Cassandra is repaying an installment loan of $3500 with 20 ...
- Math - Please check my answer thanks :) When repaing an installment loan of $3,...
- Math - please help me thanks :) Paul needs to repay a loan(installment loan) of...
- eco - Suppose a person pays $80 of annual interest on a loan that has a 5 ...
- Math - Suppose you borrowed $25,000 for a car at an APR of 8%, which you are ...
- Math - Stillwater hospital is borrowing $1,000,000 for its medical office ...
- SOMEBODY HELP ME WITH MATH!!!!!! - A person wishes to borrow $20,000 and has the...
- business math - financing furniture that costs $4200.00 with a two year ...

More Related Questions