A woman went to the Beneficial Loan Company and borrowed $10,000. She must pay $323.53 at the end of each month for the next 60 months. What is the monthly interest rate she is paying

Question

Business

Peyton Gallagher

4 January, 16:55

A woman went to the Beneficial Loan Company and borrowed $10,000. She must pay $323.53 at the end of each month for the next 60 months. What is the monthly interest rate she is paying

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Answers (1)

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Cloe · Answer 1

The Interest rate is 2%

Explanation:

The formula for computing the rate is as using the excel:

=Rate (nper, Pmt, pv, fv, type)

where

nper is number of years which is 60 months

PMT is monthly payment which is $323.53

PV is Present value which is - $10,000

FV is Future value which is $0

Type is also 0

So, putting the values above:

=Rate (60,323.53,-10000,0)

= 2%

Therefore, the rate of interest is 2%, which is monthly to be paid.