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    Computation of Monthly Interest Rate

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    You are applying for a loan to borrow $(average new car price/4). The bank loan is for 50 months and you will be paying 7% of the borrowed amount in each payment. What is the rate per month that you will be paying?

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    Solution Summary

    The solution contains step-by-step instructions on how to compute effective monthly interest rate, given the loan period and monthly payment. The rate per month that you will be paying is determined.