Questions on Word Problems: Money, Business and Interest answered by real tutors!

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Question 149229: A company borrowed $1500. It must make monthly payments of $40.50 for 42 months to pay off the loan. Use the constant ratio formula for APR to find the annual percentage rate.
YIkes! Please help
Ellen: A company borrowed $1500. It must make monthly payments of $40.50 for 42 months to pay off the loan. Use the constant ratio formula for APR to find the annual percentage rate.
YIkes! Please help
Ellen
Answer by mangopeeler07(401) About Me  (Show Source):
You can put this solution on YOUR website!
loan=1500
Payment for year=12(payment for month)
{Payment for year/loan=annual percentage rate}

payment for year=12(40.5)
payment for year=486

486/loan=annual percentage rate
486/1500=annual percentage rate
.324=annual percentage rate

32.4% APR