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Crank
2 years ago
7

In the monthly rate payment formula M= Pr(1+r)^n/(1+r)^n-1, what value do you give r if the interest rate is 7.3%?

Mathematics
1 answer:
ycow [4]2 years ago
7 0

Answer:

  r = 0.073/12 ≈ 0.0060833...

Step-by-step explanation:

In the given amortization formula, the interest rate (r) is the rate for one payment period.

<h3>Period interest rate</h3>

The given 7.3% interest rate is presumed to be a nominal annual interest rate. Since there are 12 months in a year, the corresponding monthly interest rate is ...

  7.3%/12 = 0.073/12 ≈ 0.00608333...(repeating)

The value of r that goes in this formula is 0.0608333...(repeating).

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