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26 May, 13:31

Mr. Thompson borrowed $3,000. He repaid the loan with an interest charge of $500 in 36 equal monthly payments. What approximate annual percentage rate did he pay? Find the answer to the nearest tenth of a percent.

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  1. 26 May, 14:59
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    The formula is

    APR = (2 * n * I) / [P * (N + 1) ]

    APR = (2*12*500) : (3,000 * (36+1))

    APR = (2*12*500) : (3,000*37)

    APR=0.1081*100

    APR=10.81%
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