Interest Rate A man purchases a diamond ring for a down payment of and monthly installments of for . Assuming that interest is compounded monthly, what interest rate is he paying?
The interest rate.
A man purchases a diamond ring for a down payment of and monthly installments of 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 actual purchase price,
is the down payment,
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 instalments.
Consider the values, , , , and .
Substitute for , 24 for and for in the formula given below:
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