Find the APR (true annual interest rate), to the nearest half percent, for the following loan.
-Amount Financed $= \$ 2300$
Finance Charge $= \$ 260$
Number of Monthly Payments $= 24$

Question

Quizplus · Accepted Answer

The APR can be calculated using the formula for the finance charge: APR = (2 * n * Finance Charge) / (Amount Financed * (n + 1)), where n is the number of payments. Substituting the given values: APR = (2 * 24 * 260) / (2300 * (24 + 1)) = 12480 / 57500 = 0.217, or 21.7% annually. However, since the payments are monthly, this rate needs to be divided by 2 to find the semi-annual rate, which is approximately 10.85%. Rounding to the nearest half percent gives us 10.5%.

Find the APR (True Annual Interest Rate), to the Nearest =$2300= \$ 2300=$2300

Find the APR (True Annual Interest Rate), to the Nearest $= \$ 2300$