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?
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...
(The entire section contains 187 words.)
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