Question

Find I. Choose the correct answer.

Amount Financed (m) = $1,750
Number of Payments per year (y) = 12
Number of Payments (n) = 36
Total Interest (c) = $300.00

I = %.

Answer 1

I=(2×12×300)÷(1,750×37)*100==11.12%

Answer 2

Answer: 11.12 % (approx)

Explanation:

Since, We know that,

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

Where y = payment per year

c = total interest paid

m = amount financed

n = total number of payment

I = true interest rate ( in decimals )

Here, m= $1,750, y = 12, n = 36 and c = $300

Thus,
`I = (2* 12* 300)/(1750(36+1))`

`I = (7200)/(1750* 37)`

`I = (7200)/(64750)`

`I =0.11119691119`

⇒
`I =11.119691119\% \approx 11.12\%`