Interest Rate Janet’s payments on her car are a month for . Assuming that interest is compounded monthly, what interest rate is she paying on the car loan?
The interest rate paid by Janet on the car loan.
Janet’s payments on her car are a month for . Interest is compounded monthly.
Solve for in the installment buying formula,
, using a graphing device to graph as a function of the interest rate .
is the amount of monthly payment,
is the present value of annuity,
is the interest per time period,
is the interest rate,
is the no. of period,
is the time-period in years and
is the total number of installments.
Consider the values, , , and .
Substitute for , 36 for and 12500 for in the formula given below:
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