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In the monthly payment formula

[tex]\[ M = \frac{Pr(1+r)^n}{(1+r)^n-1}, \][/tex]

what value do you give [tex]\( r \)[/tex] if the interest rate is [tex]\( 7.3\% \)[/tex]?

Sagot :

GinnyAnswer
To solve for [tex]\( r \)[/tex] in the monthly payment formula when given an interest rate of 7.3%, follow these steps:

1. Identify the interest rate given: The nominal annual interest rate provided is 7.3%.

2. Convert the percentage interest rate to a decimal format:
- The given interest rate is 7.3%. To convert this percentage to a decimal, divide by 100.
- [tex]\[ r = \frac{7.3}{100} \][/tex]

3. Simplify the decimal conversion:
- [tex]\[ r = 0.073 \][/tex]

Thus, the value of [tex]\( r \)[/tex] to be used in the monthly payment formula [tex]\( M = \frac{\operatorname{Pr}(1+r)^n}{(1+r)^n-1} \)[/tex] is [tex]\( 0.073 \)[/tex].
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