SOLUTION: A car worth $12000, is purchased at the beginning of 2013, with a deposit of $2000. The remainder is borrowed from the bank, with interest compounding annually, and paid off in mon

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Question 923616: A car worth $12000, is purchased at the beginning of 2013, with a deposit of $2000. The remainder is borrowed from the bank, with interest compounding annually, and paid off in monthly instalments of $349.92, until the end of 2015.
What was the annual compound interest rate from the bank?
I got 1.71%.
Can anyone please help me work out the solution for this question?? :(
All your answers will be appreciated
thank you

Found 2 solutions by ewatrrr, josmiceli:
Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
In General A%28t%29+=+P%281%2Br%2Fn%29%5E%28nt%29
A = Accumulated Amount 36+%2A+349.92
P= principal = 10,000
r= annual rate = .
n= periods per year = 1
t= years = 3
A%2FP+=+%281%2Br%29%5E%283%29
root%283%2C+12594.40%2F10000%29 - 1 = r = .08 0r 8% interest

Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
The formula is:
+A+=+P%2A%28+1+%2B+r+%29%5Et+
for annually compounded interest loans
+t+ is the years to pay off the loan
+r+ = the interest rate
+P+ = the principle of the loan
+A+ = what you end up paying
-------------------------------
Take $2,000 off the principle, so the loan starts with
+12000+-+2000+=+10000+
+P+=+10000+
------------------
There are +36+ in the +3+ years from the beginning of
2013 to the end of2015
The amount paid to the bank in those 3 years is:
+36%2A349.92+=+12597.12+
+A+=+12597.12+
-------------------
+12597.12+=+10000%2A%28+1+%2B+r+%29%5E3+
+%28+1+%2B+r+%29%5E3+=+1.259712+
+3%2Alog%28+1+%2B+r+%29+=+log%28+1.259712+%29+
+3%2Alog%28+1+%2B+r+%29+=+.1002713+
+log%28+1+%2B+r+%29+=+.033424+
+10%5E%28.033424+%29+=+1+%2B+r+
+1+%2B+r+=+1.080001+
+r+=+.08+
The compound interest rate is 8%
Check my math, calculator work, and maybe
get a 2nd opinion, too