Question

2.

Find the annual percentage rate, using the annual percentage rate table.
Amount Financed: $8,900

Finance Charge: $1,030.62

Number of Payments: 24

Answer 1

Amount Financed: $8,900
Finance Charge: $1,030.62
Number of Payments: 24

(Finance Charge)/(Amount Financed)*100$=($1,030.62)/($8,900)*100$
(Finance Charge)/(Amount Financed)*100$=(0.1158)*100$
(Finance Charge)/(Amount Financed)*100$=$11.58

In the row of number of Payments 24, we look for:
(Finance Charge)/(Amount Financed)*100$=$11.58, and we to which annual porcentage rate it corresponds in the first row

Answer: The annual percentage rate is 10.75%