Ask Question
BusinessBusiness
12 March, 04:47

You have just purchased a car and, to fund the purchase, you borrowed $31,000. If your monthly payments are $493.25 for the next 6 years, what is the APR of the loan?

+5
Answers (1)
  1. 12 March, 08:40
    0
    4.56%

    Explanation:

    The annual percentage rate refers to the rate at which the loan amount is equal to the present value of cash flows

    In mathematically

    Loan amount = Present value of cash flows

    Loan amount = Monthly payment * PVAF (rate, number of years)

    $31,000 = $493.25 * PVAF (rate, 72 months)

    So,

    PVAF (rate, 72 months) = 62.8485

    And, the monthly rate is = 0.38%

    So, the APR is

    = Monthly rate * total number of months in a year

    = 0.38% * 12

    = 4.56%

    The 72 months is

    = 6 years * 12 months

    = 72 months
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “You have just purchased a car and, to fund the purchase, you borrowed $31,000. If your monthly payments are $493.25 for the next 6 years, ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
When the first Pizza Hut opened its doors back in 1958, it offered consumers one style of pizza: its Original Thin Crust Pizza. Since its modest beginnings, Pizza Hut has established itself as the leader of the $25 billion pizza industry.
Answers (1)
The Adept Co. is analyzing a proposed project. The company expects to sell 3,300 units, give or take 4 percent. The expected variable cost per unit is $11 and the expected fixed costs are $12,500.
Answers (1)
Dougan, Inc. allocates overhead based on a predetermined overhead rate of $2.40 per direct labor hour. Employees are paid $12.00 per hour. Job 24 requires 4.2 pounds of direct materials at a cost of $15.00 per pound. Employees worked a total of 17.
Answers (1)
Which is an example of someone who is cyclically unemployed? A. autoworker who is temporarily laid off from an automobile company because of a decline in sales. B.
Answers (1)
If the contribution margin is not sufficient to cover fixed expenses:Multiple Choicevariable expenses equal contribution margin. contribution margin is negative. a loss occurs. total profit equals total expenses.
Answers (1)
New Questions in Business
In 2018, Gail had a § 179 deduction carryover of $30,000. In 2019, she elected § 179 for an asset acquired at a cost of $115,000. Gail's § 179 business income limitation for 2019 is $140,000. Determine Gail's § 179 deduction for 2019.
Answers (1)
The Widget Company's produces several brands. Total sales for Brand "A" are forecasted to be $950,000. The portion of the companies' fixed costs that are assigned to Brand "A" is $300,000. Brand "A" sells for $310. Its variable cost per unit is $238.
Answers (1)
Gamma corporation, an american company, signs a contract with theta corporation, a corporation from another nation, where theta will provide gamma with certain raw materials.
Answers (1)
Bagfur is a manufacturer of original leather handbags. Its business has dropped as the use of leather has been banned in a lot of countries.
Answers (1)
The person or group most responsible for a product meeting is?
Answers (1)
Home » Business » You have just purchased a car and, to fund the purchase, you borrowed $31,000. If your monthly payments are $493.25 for the next 6 years, what is the APR of the loan?
Sign Up Forgot Password?