When an auto loan's terms are 8% per year interest,seven years in length,and a purchase price of $20,000,what value should be entered in the Rate field?
A) 8%
B) .08*12
C) .08/12
D) 8%-12

Question

Quizplus · Accepted Answer

The interest rate is given as 8% per year, so to calculate the monthly rate we need to divide by 12 (since there are 12 months in a year). Therefore, the monthly interest rate is 0.08/12, which is answer choice C.

When an Auto Loan's Terms Are 8% Per Year Interest,seven