Answered

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Ruby Crye obtained an installment loan of $3,870 to purchase new furniture.
The finance charge is $378.10. She agreed to repay the loan in 18 monthly
payments. What is the annual percentage rate?

Sagot :

The annual percentage rate is 0.54%

To solve this problem, we have to apply the concept of simple interest

Simple Interest

The formula of simple interest is given as

[tex]I = {PRT}[/tex]

Where;

  • I = Interest (finance charge)
  • P = principal
  • R = rate
  • T = time

Let us substitute the values and solve for the rate.

[tex]I = {PRT} \\378.10 = {3870*R*18}\\378.10 = 69660R\\R = \frac{378.10}{69660}\\ R= 0.0054\\R= 0.0054 * 100 \\R = 0.54 \%[/tex]

The annual percentage rate is 0.54%

Learn more on simple interest here;

https://brainly.com/question/1115815

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