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    Monthly interest rate on a car loan

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    You took out a car loan. You must pay $500 a month for 48 months. You calculate that the FV of the loan is $33,034.18. What is your monthly interest rate?

    a)1.0% b)2.5% c)3.1% d)1.3% e)1.90%
    f)2.9% g)2.1% h)0.94% i)0.83% j)2.13%

    © BrainMass Inc. brainmass.com December 24, 2021, 5:06 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/monthly-interest-rate-car-loan-28621

    SOLUTION This solution is FREE courtesy of BrainMass!

    FVIFA= Future Value Interest Factor for an Annuity

    FV= $33,034.18
    Monthly payments= $500
    FVIFA x Monthly payments = FV
    Therefore FVIFA = FV / Monthly payments= 66.06836 =33034.18/500

    No of months= $48
    Reading from the charts for monthly interest rate= 1.30% FVIFA (48 periods, 1.3% rate=) 66.06835821

    Answer: d) 1.30%

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 5:06 pm ad1c9bdddf>
    https://brainmass.com/business/interest-rates/monthly-interest-rate-car-loan-28621

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