## Related questions with answers

Question

Umeki Akita repaid a loan of $3,200 in 15 monthly inst allments of$232.80 each. Use the annual percentage rate table in Chapter 4 to find the APR on his loan.

Solution

VerifiedStep 1

1 of 2First find total interest:

= $232.80$\times$15 - \$3,200\\ = \$292 total interest\\\\ Find number of \$100s in the principal:\\ = \$3,200$\div$\$100\\ = 32\\\\ Then divide the total interest (computed in \#22) by 40:\\ = \$292$\div$32\ = $9.125 finance charge per $100 of amount financed\

Use the Annual Percent age Rate Tables on page 162. Read across the rows for 15 payments until you come to the amount closest to $9.125. Since $9.06 is the closest amount, the rate is 13$$$\dfrac{1}{4}$%.

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