posted by zyanna on .
Henry Devine bought a new dishwasher for $320. He paid $20 down and made 10 monthly payments
of $34. What actual yearly interest rate did Henry pay?
B. 68.75End of exam
Please explain to me
Value of loan = $300
let the monthly rate be i
34*(1- (1+i)^-10)/i = 300
hard to solve this type of equation but I have some methods and it gave me
i = appr .02343
so the annual rate compounded monthly is 28.1 %
34(1 - 1.02343^-10)/.02343 = = 299.9988 , not bad I would say
None of your choices are valid using proper compound interest formulas