Find APR (rounded to the nearest tenth of a percent) for the loan. Purchase a living room set for $3,600 at 8% add-on interest for 3 years.

Question

Find APR (rounded to the nearest tenth of a percent) for the loan. Purchase a living room set for $3,600 at 8% add-on interest for 3 years.

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Ben Gia 6 months 2021-07-28T05:16:13+00:00 1 Answers 13 views 0

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    2021-07-28T05:17:30+00:00

    Answer:

    The APR for the loan 15.6%

    Step-by-step explanation:

    From the given information:

    The annual percentage can be calculated by using the formula:

    APR = \dfrac{2 \ Nr}{N +1}

    where;

    N = number of payments = 3 years = 12 × 3 = 36 months

    r = add-on interest rate = 8% = 0.08

    Replacing our value to calculate the APR, we get:

    APR = \dfrac{2 \times  36 \times 0.08}{36 +1}

    APR = \dfrac{5.76}{37}

    APR = 0.155675

    APR ≅ 15.6%

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