Finance

You have arranged for a loan on your new car that will require the first payment today. The loan is for $32,000, and the monthly payments are $620.

Required:
If the loan will be paid off over the next 60 months, what is the APR of the loan?

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  1. 32000 = 620 + 620( 1 - (1+i)^-59)/i

    My favourite webpage, Wolfram, says
    http://www.wolframalpha.com/input/?i=32000+%3D+620+%2B+620%28+1+-+%281%2Bx%29%5E-59%29%2Fx

    i = .0052576 or
    12i = .06309

    which is 6.309% per annum , compounded monthly

    (look past all that messy output to where it says,
    real solution x = .0052576

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