Question

You borrow $2,500. you are to pay back the loan in 36 monthly payments of $79.50. what true annual interest are you paying to the nearest tenth of a percent?

Answer 1

9.4%

Step-by-step explanation:

use I = 2yc / m(n+1)

Answer 2

4.8%

Step-by-step explanation:

36months*$79.50=$2862

$2862-borrowed 2,500=362

362/3 years=$120 2/3

this means that the interest is 120 2/3 /2500, which is 0.048266, or 4.82, or in your case 4.8%