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Alexia took out a 12-year loan for $72,000 to renovate her home. If her monthly payments are $680, what is the interest rate?

User Jake Duth
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1 Answer

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Answer:

Finding the total accrued amount is necessary before we can determine the interest rate.

Simply multiplying the monthly payment by the number of months in a 12-year period will give us the accrued amount.

144 months in 12 years.

$680 x Monthly Payment

A = 680 * 144

A = $97920

We can use the following formula now that we know the total accrued sum:

A= 97920

P = 72000

t= 12

Let's replace them with our values now.

The percentage value is then obtained by multiplying the r value by 100.

0.03 x 100 = 3%

The interest rate for Alexia is 3%.

User Kevin Delord
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