A car dealer sells a new car for . He also offers to sell the same car for payments of

Chapter 4, Problem 41

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A car dealer sells a new car for . He also offers to sell the same car for payments of per month for five years. What monthly interest rate is this dealer charging? To solve this problem you will need to use the formula for the present value of an annuity consisting of equal payments of size with interest rate per time period: Replacing by , show that Use Newtons method to solve this equation.

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