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Compute the periodic rate and interest in the first period for a $2,400 loan with 8.5% APR for the following periods. a. Monthlv

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Final answer:

The periodic rate for a $2,400 loan with 8.5% APR, paid monthly, is 0.7083%. The interest in the first period is $17.00.

Step-by-step explanation:

The periodic rate can be calculated by dividing the annual percentage rate (APR) by the number of periods in a year. In this case, the loan has a 8.5% APR and is paid monthly, so the number of periods is 12. Therefore, the periodic rate can be calculated as:



Periodic rate = APR / Number of periods



Periodic rate = 8.5% / 12



Periodic rate = 0.7083%



To calculate the interest in the first period, we multiply the loan amount by the periodic rate:



Interest = Loan amount * Periodic rate



Interest = $2,400 * 0.7083%



Interest = $17.00

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