Question

A finance company offers a "12% plan". The cost of a one-year loan is 12%, and this cost is added to the loan. This total is then divided by 12 to get the monthly payments. Calculate the effective interest rate being charged for a loan of $9,000.

Answer 1

Answer:

840

Explanation:

Interest rate=12%

Interest for $9000= 12% × 9000

Interest for $9000= 12/100 × 9000

Interest for $9000 = $1080

Interest + principal loan amount = $9000 + $1080 = $10080

Monthly payment = $10080/12months = $840