SOLUTION: A man purchases a pressure cooker priced ₹120 on the condition that he will pay ₹25 down and balance in 4 monthly installments of ₹25. What is the rate of interest?
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-> SOLUTION: A man purchases a pressure cooker priced ₹120 on the condition that he will pay ₹25 down and balance in 4 monthly installments of ₹25. What is the rate of interest?
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Question 1133670: A man purchases a pressure cooker priced ₹120 on the condition that he will pay ₹25 down and balance in 4 monthly installments of ₹25. What is the rate of interest? Answer by Theo(13342) (Show Source):
present value = 95
future value = 0
number of time periods = 4
payment amount = -25
interest rate percent per time period = what you want to find.
payment made at the end of each time period.
the time periods are months, so your payment will be made at the end of each month.
the percent value is shown as positive because it's money that you borrowed to pay for the pressure cooker.
the payment is shown as negative because it's money that you spend in order to apy off the loan.
once yo've made your inputs, you click on IR and the calculator tells you the interest rate percent per time period.
that interest rate percent will be equal to 2.083778 percent.
that's the interest rate per momth.
the equivalent interest rate per year will be 12 * that which makes the annual percent interest rate equal to 25.005336 percent.
this can be rounded to approximately 25.01 percent.
this is what the calculator display looks like after you're done.
