Determining effective annual interest rate of loan

Reference no: EM13140925

You aare considering buying a new $25,000 car. The car dealer offers you a 13.6% loan with 30 equal monthly payments. Upon the questioning the dealer, you find that this unusual loan has "add-on" interest, so that an interest charge of $8,500 (13.6% x $25,000 x 2.5 years) is added on to the $25,000 for a total amount to be repaid of $33,500. The payments are $1,116.67 each month ($33,500/30)

What is the approximate effective annual interest rate of this loan?

Reference no: EM13140925

Questions Cloud

Create all necessary journal entries : Prepare any journal entries (if necessary) that would be required related to the Note Receivable at end of 2009, 2010, 2011, and 2012. Assume that $100,000 is received from ColdPlay Co. on 12/31/2013. Prepare all necessary journal entries for 2013.

Explain an organization owns the network : Question about Subnets, An organization owns the network 200.1.1.0/24 and wants to form subnets for 4 departments, with hosts as follows

Thesis for the whisky rebellion, by william hogeland : what would be a good thesis statement for the Whisky Rebellion, by William Hogeland?

Discuss how the barrier function of membranes is utilized : Discuss how the barrier function of membranes is utilized in the production of ATP in the electron transport system of mitochondria.

Determining effective annual interest rate of loan : You aare considering buying a new $25,000 car. The car dealer offers you a 13.6% loan with 30 equal monthly payments. Upon the questioning the dealer, you find that this unusual loan has "add-on" interest-What is the approximate effective annual in..

Compute the depreciation : In 2011, the estimates are revised. Holt now feels the computer will be used until December 31, 2012, when it can be sold for $500. Compute the 2011 depreciation.

Estimate the cash flow to be included in the horizon year : Estimate the cash flow to be included in the horizon year and what will be the horizon value if there is no profit growth?

Describe the functionality of the above dfsm : Describe the functionality of the above DFSM using transition tables. Consider that the system starts always from state B. What happens if the system will start from another state - say A?

Jack''s outdoor world : Jack's Outdoor World is a company that manufactures and sells garden furniture. They have been operating for the past ten years and have a comfortable share of the market.

User Account

All Pages