166k views
3 votes
Melissa Costouras obtains a $3,000 loan for darkroom equipment. She makes six monthly payments of $511.18. Determine the APR.

1 Answer

1 vote

Final answer:

The APR for the loan is 2.236%.

Step-by-step explanation:

To determine the APR, we need to first calculate the total amount paid over the course of the loan. Melissa makes six monthly payments of $511.18, so the total amount paid is 6 * $511.18 = $3067.08. The loan amount is $3000, so the interest paid is $3067.08 - $3000 = $67.08.

Next, we need to calculate the annual interest rate. Let's assume that the loan was for one year to make calculations easier.

The interest rate would then be $67.08 / $3000 = 0.02236. To convert this to a percentage, we multiply by 100 to get an APR of 2.236%.

User Jcarballo
by
3.2k points