# Effective rate of interest on installment loan

Vroom Motorcycle Company is borrowing $30,000 from First State Bank. The total interest charge is $9,000. The loan will be paid by making equal monthly payments for the next three years. What is the effective rate of interest on this installment loan?

© BrainMass Inc. brainmass.com October 9, 2019, 8:44 pm ad1c9bdddfhttps://brainmass.com/economics/banking/effective-rate-interest-installment-loan-160968

#### Solution Preview

Vroom Motorcycle Company is borrowing $30,000 from First State Bank. The total interest charge is $9,000. The loan will be paid by making equal monthly payments for the next three years. What is the effective rate of interest on this installment loan?

Note: the abbreviation have the ...

#### Solution Summary

The solution calculates effective rate of interest on an installment loan.

$2.19