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Mr. Thompson borrowed $3,000. He repaid the loan with an interest charge of $500 in 36 equal monthly payments. What approximate annual percentage rate did he pay? Find the answer to the nearest tenth of
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Mr. Thompson borrowed $3,000. He repaid the loan with an interest charge of $500 in 36 equal monthly payments. What approximate annual percentage rate did he pay? Find the answer to the nearest tenth of a percent.

User Ivan Klochkov
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1 Answer

3 votes
The formula is
APR=(2 × n × I) / [P × (N + 1)]
APR=(2×12×500)÷(3,000×(36+1))
APR=(2×12×500)÷(3,000×37)
APR=0.1081×100
APR=10.81%
User Gaggina
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