finance math

Richard purchased a car for $39,905. He made a downpayment of $15,000 and paid $614 monthly for 45 years. Find the APR.
Richard was able to payoff the loan at the end of 30 months. Using the Actuarial method find he unearned interest, and payoff amount.

My answer 39905-15000=24905
614*48=29472
29472-24905=4567
4567/24905*100=18.34
The APR will be 9%

  1. 👍 0
  2. 👎 0
  3. 👁 94
  1. You must have a typo. Richard spent 45 years paying for a car?

  2. Correction not 45 yrs but 4yrs

    1. 👍 0
    2. 👎 0
    posted by Latrice
  3. not that simple

    let the monthly rate be i
    614 (1 - (1+i)^-48)/i = 24905
    very tough to solve
    I will let Wolfram do it

    https://www.wolframalpha.com/input/?i=sove+614+(1+-+(1%2Bx)%5E-48)%2Fx+%3D+24905

    i= .00709283
    12i = .08511... or 8.511% per annum compounded monthly

    1. 👍 0
    2. 👎 0
    posted by Reiny

Respond to this Question

First Name

Your Response

Similar Questions

  1. Math

    Richard purchased a car for $39,905. He made a downpayment of $15,000 and paid $614 monthly for 4 years. Find the APR. Richard was able to payoff the loan at the end of 30 months. Using the Actuarial method find he unearned

    asked by Latrice on April 12, 2016
  2. Math

    Richard brought a new car for $39905. He made a down payment of $15000 and payments are $614 monthly for 4 years. At the end of 30 months he was able to payoff the loan using the Rule 78 a. Find he unearned interest b. Find the

    asked by Petra on April 17, 2016
  3. Bus Finance

    You want to purchase a home. cost $165,000. you have $40,000 downpayment. you want to finance rest at 3.5% for 15 years. how much will monthly mortgage be? How much in total will you pay over the 15 years even counting the

    asked by allison on February 3, 2012
  4. math

    I'm still working on my car project and wondering if you could check this- this question says: If x represents the number of months and P represents the total paid for the car, write a formula that describes the total amount you

    asked by carly on March 6, 2018
  5. finance

    Richard likes the car price of $10,000 but financing through the dealer is no bargain.He has $2,000 for a down payment,so he needs $8,000 for the loan.Richard borrows $8000 for a period of four years at an add on intrest rate of

    asked by tina on January 31, 2011
  6. Math

    Darla purchased a new car during a special sales promotion by the manufacturer. She secured a loan from the manufacturer in the amount of $24,000 at a rate of 4.2%/year compounded monthly. Her bank is now charging 6.8%/year

    asked by Kayla on November 28, 2017
  7. MATH 123

    Darla purchased a new car during a special sales promotion by the manufacturer. She secured a loan from the manufacturer in the amount of $23,000 at a rate of 4.6%/year compounded monthly. Her bank is now charging 6.2%/year

    asked by Anonymous on July 5, 2017
  8. accounting

    how would the table of analysis be set up with these transactions: started business with $25,000 paid rent $2,000 purchased equipment $6,000 only paid 40% owes difference purchased food and beverage $4,000 paid 75% in cash owes

    asked by Keishante on March 14, 2012
  9. Financial Accounting

    1. Post the following transactions of a restaurant to prepare the journal ledger and trial balance. Jan - 2011 Transaction Amount 5 Started the business with cash 2,50,000 10 Deposited in the bank 50,000 15 Purchased tables and

    asked by Kavya Tank on January 11, 2012
  10. Bus Finance

    You want to purchase a home. cost $165,000. you have $40,000 downpayment. you want to finance rest at 3.5% for 15 years. how much will monthly mortgage be? How much in total will you pay over the 15 years even counting the

    asked by Allison on February 6, 2012

More Similar Questions