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Paul needs to repay a loan(installment loan) of $3,500 with 20 equal monthly payments of $196 each. What is the APR of the laon?
I got 11.16% then I got 12 % so I don't know

Paul needs to repay a loan(installment loan) of $3,500 with 20 equal monthly payments of $196 each. What is the APR of the laon?

I got 11.16% then I got 12 % so I don't know

From R = Pi/[1 - (1+i)^-n]

Using an APR of 13.25% compounded monthly:

R = 3500(.011041666)/[1-(1.011041666)^-20] = $196.00.

To calculate the APR (Annual Percentage Rate) of the loan, we need to use a formula that takes into account the principal amount, the equal monthly payments, and the total number of payments. Here's how you can calculate the APR for this loan:

Step 1: Determine the total amount paid over the loan term:
The total amount paid over the loan term is the product of the monthly payment and the number of payments:
Total amount paid = Monthly payment * Number of payments

In this case, the monthly payment is $196, and the number of payments is 20. Therefore:
Total amount paid = $196 * 20 = $3,920

Step 2: Calculate the total interest paid:
The total interest paid can be obtained by subtracting the original loan amount from the total amount paid:
Total interest paid = Total amount paid - Loan amount

In this case:
Loan amount = $3,500
Total interest paid = $3,920 - $3,500 = $420

Step 3: Calculate the APR:
The APR can be determined using the following formula:

APR = (Total interest paid / Loan amount) * (12 / Number of payments)

In this case:
APR = ($420 / $3,500) * (12 / 20) = 0.12 or 12%

Therefore, the APR for this loan is 12%.