You want to purchase a new motorcycle that costs $29,800. The most you can pay each month is $510 over the life of the 78-month

Question

cupoosta [38]

3 years ago

9

You want to purchase a new motorcycle that costs $29,800. The most you can pay each month is $510 over the life of the 78-month

loan. What is the highest APR that you could afford

Business

1 answer:

TiliK225 [7] · Answer 1 · 2022-08-13T19:46:19+03:00

Answer:20,5369%

Explanation:We know APR is the Annual Percentage Rate that is paid over a loan. If we are to pay during 78 months at most $510 each month, then we could pay in total 510*78=$39780 in the course of the six years and a half that constitute the 78 months. This means that yearly we can pay in interest $39780/6,5=$6120 each year, this represents the interest over the loaned money, i.e., the $29800. Then the APR is

$\\\frac{6120}{29800} =20,5369\%$ annualy or 1,71141% monthly and it is the highest APR you could afford, 20.5369%