math

Loan amount = $9,500
Monthly payments = $227.50
Time of loan contract = 5 years

True annual interest rate (to the nearest tenth) =

  1. 👍 0
  2. 👎 0
  3. 👁 463
asked by wilton
  1. 9500 = 227.5( 1 - (1+r)^-60)/r
    where r is the monthly rate
    a very tough equation to solve ....

    Wolfram says r = .01275 as the monthly rate

    so annual rate compounded monthly = .153
    or 15.3 %

    equivalent annual rate:
    1+i = 1.01275^12 = 1.164
    or 16.4%

    1. 👍 0
    2. 👎 0
    posted by Reiny
  2. http://www.wolframalpha.com/input/?i=solve+9500+%3D+227.5%28+1+-+%281%2Bx%29%5E-60%29%2Fx

    look at second line output, the negative rates are to be ignored.

    1. 👍 0
    2. 👎 0
    posted by Reiny

Respond to this Question

First Name

Your Response

Similar Questions

  1. math

    Using the formula, compute the true annual interest rate. Loan amount = $9,500 Monthly payments = $227.50 Time of loan contract = 5 years True annual interest rate (to the nearest tenth

    asked by wilton on May 2, 2014
  2. math

    Using the formula, compute the true annual interest rate. Loan amount = $9,500 Monthly payments = $227.50 Time of loan contract = 5 years True annual interest rate (to the nearest tenth) = _____.

    asked by angel on May 16, 2016
  3. math

    Loan amount = $10,000 Monthly payments = $258.50 Time of loan contract = 5 years True annual interest rate (to the nearest tenth) =

    asked by wilton on May 5, 2014
  4. wilton

    Loan amount = $10,000 Monthly payments = $258.50 Time of loan contract = 5 years True annual interest rate (to the nearest tenth) =

    asked by wilton on May 2, 2014
  5. Math

    Suppose you take out a 45​-year ​$100,000 mortgage with an APR of 6​%. You make payments for 2 years ​(24 monthly​ payments) and then consider refinancing the original loan. The new loan would have a term of 20 ​years,

    asked by BB on April 18, 2019
  6. Math

    You need to borrow $20,000 to buy a car. You can only afford to make monthly payments of $200. The bank offers 3 choices: 3-year loan at 5%, 4-year loan at 6%, and a 5-year loan at 7%. a) What’s the monthly payment for each

    asked by Emilio on February 21, 2016
  7. Maths

    Firm has a $500,000 loan with 9% APR (compounded monthly) Loan is 5-yr based on a 15-yr amortization, meaning loan payments will be calculated as if you take 15 years to pay off the loan, but actually must do so in 5 yr. To do

    asked by Sushmitha - please help on February 14, 2014
  8. Math

    Suppose you borrowed $25,000 for a car at an APR of 8%, which you are paying off with monthly payments of $510 for 5 years. a) What’s the loan principal? b) What’s the annual interest rate? c) How many payments do you make in

    asked by Emilio on February 21, 2016
  9. Computer science

    Write an HTML form that prompts the user to enter loan amount, interest rate, and number of years, as shown in Figure 1. Clicking the Compute Payment button invokes a JSP program to compute and display the monthly and total loan

    asked by AN3852 on July 21, 2013
  10. real estate finance

    I need to find the mortgage loan amount and can't remember how to do it. The borrowers have a combined gross monthly income of $50,400. Sale price is $190,000 and buyers are able to obtain a 90% conventional FNMA/FHLMC loan at 4

    asked by tmouery on March 23, 2013

More Similar Questions