Determining effective annual interest rate of loan

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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

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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..

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