Question

Find I. Choose the correct answer.

Amount Financed (m) = $1,750
Number of Payments per year (y) = 12
Number of Payments (n) = 36
Total Interest (c) = $300.00

I = %.

Answer 1

I=(2×12×300)÷(1,750×37)*100==11.12%

Answer 2

Answer:   11.12 % (approx)

Step-by-step explanation:

Since, We know that,

$I = \frac{2yc}{m(n+1)}$

Where y = payment per year

c = total interest paid

m = amount financed

n = total number of payment

I = true interest rate ( in decimals )

Here, m= $1,750, y = 12, n = 36 and c = $300

Thus, $I = \frac{2\times 12\times 300}{1750(36+1)}$

$I = \frac{7200}{1750\times 37}$

$I = \frac{7200}{64750}$

$I =0.11119691119$

⇒ $I =11.119691119\% \approx 11.12\%$