Solution: A car dealer sells a new car for . He also offers to sell the same car for

Chapter 4, Problem 33

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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 ve 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: A R i 1 1 inReplacing by , show that48x1 x60 1 x60 1 0 Use Newtons method to solve this equation.

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