Amount Financed (m) = $2,500 Number of Payments per year (y) = 12 Number of Payments (n) = 36 Total Interest (c) = $158.15

Question

Mathematics

Gilbert Kidd

2 May, 08:34

Amount Financed (m) = $2,500 Number of Payments per year (y) = 12 Number of Payments (n) = 36 Total Interest (c) = $158.15

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Cynthia Harrell · Answer 1

The number of payments per year is 12

The number of payments is 36 which means that the term lasted for 3 years.

The total interest is $158.15 and the amount financed is $2500.

The interest rate is

158.15/2500 = 6.33%

In nominal month, that is

(1 + r/12) ^12 - 1 = 0.0633

Solve for r