Question

My cousin borrowed $18,000 for a new car loan for 6 years. He told me that at the end of the loan, he had paid $25,560 for the interest and principal. What was the rate of the loan?

Answer 1

6%

Explanation:I

I'm going to assume that the interest is compoudning anually and there was only one payment

we know that

FV=PV(1+i)^N

which means taht

25560=18000(1+i)^6

Solve for i and get .06 or 6%