Eden finances a purchase of $611.03 by making monthly payments of $26.17 for 2.5 years. What annual interest rate, compounded monthly, is she being charged?
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Eric Bizzell
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You are asked to find the annual interest rate if the monthly payment on an installment loan is $26.17 payed over 30 months for a total of $611.03.
From the lender's point of view this is an annuity. We can use:
`"PMT"="PV"i/(1-(1+i)^(-n))` where pmt is the monthly payment, pv is the present value (the loan amount), n is the number of compounding periods, and...
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