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3 years ago

Al's obtained a discount loan of $68,500 today that requires a repayment of $93,228, 4 years from today. What is the APR

Business

1 answer:

saw5 [17]3 years ago

4 0

Answer:

Explanation:

To find the answer, you have to use the formula to calculate the rate of interest:

r=(FV/PV)^1/n-1, where

r= rate of interest

FV= future value=$93,228

PV= present value=$68,500

n= number of periods of time=4 years

Now, you can replace the values in the formula:

r=(93,228/68,500)^1/4-1

r=1.08-1

r=0.08→8%

According to this, the APR is 8%.

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rounding to nearest dollar

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