Final answer:
The APR interest rate of a six-year, monthly $400 annuity with a present value of $20,000 is 144%.
Step-by-step explanation:
To calculate the APR interest rate of a six-year, monthly $400 annuity with a present value of $20,000, we can use the formula:
APR = ((PMT * n) / PV) * 100
Where:
PMT is the payment amount, which is $400
n is the number of periods, which is 6 years * 12 months = 72 months
PV is the present value, which is $20,000
Substituting the values into the formula:
APR = (($400 * 72) / $20,000) * 100
Simplifying the calculation:
APR = (28,800 / $20,000) * 100
= 144%
Therefore, the APR interest rate of the given annuity is 144%.