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%
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%
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