What is the APR on this loan?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Assume that interest is the only finance charge. Use financial calculator to answer the questions.
How much interest would be paid on a $8,000 installment loan to be repaid in 48 monthly installments of $210.72? Round the answer to 4 decimal places.

    % per month

What is the APR on this loan? Round the answer to 2 decimal places.

    %

Expert Solution
Step 1

Interest is the cost of borrowing a loan. It is the excess amount over the principal borrowing.

First, calculate the interest amount on the loan:

Finance homework question answer, step 1, image 1

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