SOLUTION: A newspaper advertisement offers a $4000 car for nothing down and 36 easy monthly payments of $132.46. What is the simple interest rate?
I come up with an interest rate of 53.4
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I come up with an interest rate of 53.4
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Question 930264: A newspaper advertisement offers a $4000 car for nothing down and 36 easy monthly payments of $132.46. What is the simple interest rate?
I come up with an interest rate of 53.4%, but I am sure that isn't right. I can't see to figure out what formula to use. Answer by rothauserc(4718) (Show Source):
You can put this solution on YOUR website! take 132.56 and multiply by 36 = 4768.56
subtract 4000 from 4768.56 = 768.56 of interest over 3 years
interest = principal * simple interest rate * (36/12)
simple interest rate = interest / (principal * 3)
simple interest rate = 768.56 / (4000 * 3) = 0.064046667 approx 6% per annum and 19% (3*0.064046667) over the three years of the loan
