Find the APR for the following loan (monthly payments). (Round your answer to the nearest full percent.)

Purchase a refrigerator for $2,100 at 20% add-on interest for 3 years.

225

To find the APR (Annual Percentage Rate) for a loan with monthly payments, you need to follow a specific formula and steps:

Step 1: Determine the total amount repaid.
To calculate the total amount repaid, you need to multiply the monthly payment by the number of months. In this case, since the loan term is 3 years (36 months), multiply the monthly payment by 36.

Step 2: Calculate the interest paid.
To calculate the interest paid, subtract the loan principal (amount borrowed) from the total amount repaid. In this case, subtract $2,100 (the purchase price) from the total amount repaid obtained in Step 1.

Step 3: Calculate the interest rate per month.
To calculate the interest rate per month, divide the interest paid obtained in Step 2 by the loan principal (amount borrowed). Convert the result to a decimal by dividing by 100.

Step 4: Calculate the APR.
To calculate the APR, multiply the interest rate per month obtained in Step 3 by 12 (to convert the monthly rate to an annual rate). Finally, round the result to the nearest full percent.

Let's calculate it step by step:

Step 1: Total amount repaid
Monthly payment = Principal + Principal * Interest Rate
Monthly payment = $2,100 + $2,100 * (20/100) = $2,520
Total amount repaid = Monthly payment * Number of Months = $2,520 * 36 = $90,720

Step 2: Interest paid
Interest paid = Total amount repaid - Loan principal
Interest paid = $90,720 - $2,100 = $88,620

Step 3: Interest rate per month
Interest rate per month = Interest paid / Loan principal
Interest rate per month = $88,620 / $2,100 = 42

Step 4: APR
APR = Interest rate per month * 12
APR = 42 * 12 = 504

Rounding to the nearest full percent, the APR for this loan is 504%.