Find I. Choose the correct answer.
Amount Financed (m) = $1,400
Number of Payments per year (y) = 12
Number of Payments (n) = 24
Total Interest (c) = $200.50
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To find the interest rate (I), we can use the formula:
Total Interest = Amount Financed * Interest Rate * Number of Years
In this case, the amount financed (m) is $1,400, the number of payments per year (y) is 12, and the total interest (c) is $200.50.
We can rearrange the formula to solve for the interest rate (I):
I = Total Interest / (Amount Financed * Number of Payments per year)
Substituting the given values:
I = $200.50 / ($1,400 * 12)
Calculating this expression will give us the value of the interest rate (I).
To find the interest rate I, we can use the formula:
I = (c / m) / (n / y)
First, let's plug in the given values:
c = $200.50 (total interest)
m = $1,400 (amount financed)
n = 24 (number of payments)
y = 12 (number of payments per year)
Now we can substitute these values into the formula:
I = ($200.50 / $1,400) / (24 / 12)
First, let's simplify the numerator:
I = $200.50 / $1,400
Next, let's simplify the denominator:
I = 24 / 12
Now, divide the numerator by the denominator:
I = ($200.50 / $1,400) / (24 / 12)
To divide fractions, we can multiply the numerator by the reciprocal of the denominator:
I = ($200.50 / $1,400) * (12 / 24)
Simplifying each fraction:
I = $0.143210 * 0.5
Now multiply the numbers:
I = $0.071605
Therefore, the interest rate (I) is approximately 0.0716 or 7.16%.
I = Prt
200.5 = 1,400 * R * 2
200.5 = 2,800R
0.0716 = R
7.16% = R