You've borrowed $6,903.71 and agreed to pay back the loan with monthly payments of $270. Assume the interest rate is 15% stated as an APR. a. How long will it take you to pay back the loan? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Number of months b. What is the effective annual rate on the loan? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Effective annual rate %

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 31P
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You've borrowed $6,903.71 and agreed to pay back the loan with monthly payments of $270. Assume the interest rate is 15% stated as
an APR.
a. How long will it take you to pay back the loan?
Note: Do not round intermediate calculations. Round your answer to the nearest whole number.
Number of months
b. What is the effective annual rate on the loan?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Effective annual rate
%
Transcribed Image Text:You've borrowed $6,903.71 and agreed to pay back the loan with monthly payments of $270. Assume the interest rate is 15% stated as an APR. a. How long will it take you to pay back the loan? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Number of months b. What is the effective annual rate on the loan? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Effective annual rate %
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