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24 January, 09:15

The owner of an automobile repair center purchased new electronic diagnostic equipment for $15,000. He paid down and then paid 60 monthly payments of $296.91. Determine the APR of the loan to the nearest one-half of a percent.

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  1. 24 January, 10:03
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    Answer: 11.5%

    Explanation:

    Annual Percentage Rate (APR) can be defined as the annual rate of percentage earned via investment or charged for borrowing a particular loan.



    APR = ((Fees+Interest/principal) / n) * 365) * 100

    where:

    Interest=Total interest paid over life of the loan

    Principal=Loan amount

    n=Number of days in loan term

    Using the formulae, if properly calculated, the annual percentage rate (APR) of the loan to the nearest one-half of a percent would be 11.5%
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