In Exercises 99 and 100, the formula that approximates the annual interest ate r of a

Chapter 0, Problem 100

(choose chapter or problem)

Finance In Exercises 99 and 100, the formula that approximates the annual interest rate r of a monthly installment loan is given by

\(r=\frac{\left[\frac{24(N M-P)}{N}\right]}{\left(P+\frac{N M}{12}\right)}\)

where N is the total number of payments, M is the monthly payment, and P is the amount financed.

(a) Approximate the annual interest rate for a five-year car loan of $28,000 that has monthly payments of $525.

(b) Simplify the expression for the annual interest rate r, and then rework part (a).

Text Transcription:

r=frac{[frac{24(N M-P)}{N}]}{(P+frac{N M}{12})}