A homeowner installed a new swimming pool for $8500. He paid 8% down and then paid 36 monthly payments of $243.07. Determine the APR of the loan to the nearest one-half of a percent.
Po = P - 0.08P = 8500-(0.08*8500)= $7820
243.07/mo. * 36mo. = $8750.52 Paid back.
I = Po*r*t = 8750.52-7820.00 = 930.52
7820*r*3yrs. = 930.52
23460r = 930.52
r = 0.0397 = 3.97% = APR.