High School

We appreciate your visit to Month end payments of tex 1 430 tex are made to settle a loan of tex 138 940 tex in 9 years What is the. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!

Month-end payments of [tex] \$ 1,430 [/tex] are made to settle a loan of [tex] \$ 138,940 [/tex] in 9 years. What is the effective interest rate?

Round to two decimal places. \[ \% \]

Answer :

The interest rate refers to the fee charged by the lender, expressed as a percentage of the total amount borrowed. The effective interest rate is 8.30% (rounded to two decimal places).

The effective interest rate is the actual amount paid by the borrower on a loan. The formula for effective interest rate is:

Effective interest rate formula

Effective interest rate = [(1 + i / n)^n - 1] x 100

Where i is the interest rate and n is the number of compounding periods in a year.

Month-end payments of \( \$ 1,430 \) are made to settle a loan of \( \$ 138,940 \) in 9 years.

Using the formula for the effective interest rate and substituting the given values:

Effective interest rate = [(1 + i / n)^n - 1] x 100138940

= 1430[(1 + i / 12)^12 x 9 - 1]138940 / 1430

= (1 + i / 12)^12 x 9 - 1[math]\frac{138940}{1430}+1[/math]

= (1+i/12)^12 * 9[math]\sqrt[12]{\frac{138940}{1430}}[/math]

=1+i/12i = 12[math]\left(\sqrt[12]{\frac{138940}{1430}}-1\right)[/math]i

≈ 0.6645

Effective interest rate ≈ [(1 + 0.6645/12)^12 - 1] x 100

Effective interest rate ≈ 8.30%

To know more about the interest, visit:

https://brainly.com/question/31809089

#SPJ11

Thanks for taking the time to read Month end payments of tex 1 430 tex are made to settle a loan of tex 138 940 tex in 9 years What is the. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!

Rewritten by : Barada