SOLUTION: Could someone please help me with this problem. There was an example in the book, but I didn't understand it. "An educational loan of $8400 for 10 years is to be repaid in monthly

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Question 570702: Could someone please help me with this problem. There was an example in the book, but I didn't understand it. "An educational loan of $8400 for 10 years is to be repaid in monthly installments of $122.50. What is the annual rate of this loan, computed as simple interest?"
Found 2 solutions by josmiceli, scott8148:
Answer by josmiceli(9649) About Me  (Show Source):
You can put this solution on YOUR website!
10 years times 12 months/yr = 120 payments
+120%2A122.5+=+14700+
The total interest paid is +14700+-+8400+=+6300+
This is the interest over 10 yrs, so the annual
interest is +6300%2F10+=+630+
---------------
The annual interest rate is +630%2F8400+=+.075+
The annual interest rate is 7.5%
Hope I got it

Answer by scott8148(6628) About Me  (Show Source):
You can put this solution on YOUR website!
10 years is 120 monthly payments

find the total of the payments

subtract 8400 to find the interest

divide the interest by 10 to find the annual interest

divide the annual interest by 8400 to find the percentage (interest rate)