Mathematics

Grade10

Easy

Question

# The approximate annual interest rate r of a monthly installment loan is given by the formula:

Where n is the total number of payments, m is the monthly payment, and p is the amount financed.

Find the approximate annual interest rate (to the nearest percent) for a four-year signature loan of $ 20,000 that has monthly payments of $ 500

- 9 %
- 10 %
- 8 %
- 5 %

Hint:

### The Simple Interest (S.I.) formula is a way to figure out how much interest will accrue on a given principal sum of money. The interest charged on a loan or deposit is known as compound interest. Here we have given an expression , we have to find find the approximate annual interest rate (to the nearest tenth percent) for a four-year.

## The correct answer is: 9 %

### So now we know that the cost you pay annually for borrowing money, including fees, is stated as a percentage and is known as the annual percentage rate (APR).

We have given the expression as:

Here we sed the concept of simple interest, compound interest and found out the annual rate. Simple Interest (S.I.) is a way for figuring out how much interest will accrue on a specific principal sum of money at a certain rate of interest. So the annual rate percent is 7.2%.