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4th Edition

James Stewart

Publisher: Cengage Learning

ISBN: 9781337687805

Chapter 4.7, Problem 33E

To determine

**To calculate: **The monthly interest rate.

Expert Solution

The interest rate is

**Given information:**

The annuity formula

**Formula used:**

Newton’s Method:

We seek a solution of

For

Formula:

Law of cosine

**Calculation:**

Consider the,

A =$18000

R =$375

Payments are to be made every month for 5 years.

This implies

Therefore, n =60

Re-placing i by x we get,

Hence, we get

Now, let initial approximation be

For

The second approximation is

Following with the iterations after 14 iterations will get the approximate value of x .

Hence , the monthly interest to be pay is :-