Question

Find I. Choose the correct answer. Amount Financed (m) = $1,400 Number of Payments per year (y) = 12 Number of Payments (n) = 24 Total Interest (c) = $200.50
I = answers are 13.9 13.7 and 14.1

its not 7.7

Answer 1

Answer:

Option 2 -  The interest rate is 13.7.

Step-by-step explanation:

Given : Amount Financed (m) = $1,400, Number of Payments per year (y) = 12 Number of Payments (n) = 24, Total Interest (c) = $200.50.

To find : The value of I?

Solution :

The formula used is

$c=\frac{m\times I\times (n+1)}{t\times y\times 100}$

Where,

Total Interest (c) = $200.50

Amount Financed (m) = $1,400

Number of Payments per year (y) = 12

Number of Payments (n) = 24

Number of years (t)=2 (as n=24 is payment monthly)

Substitute all values in the formula,

$200.50=\frac{1400\times I\times (24+1)}{2\times 12\times 100}$

$I=\frac{200.50\times 2\times 12\times 100}{1400\times 25}$

$I=\frac{481200}{35000}$

$I=13.7$

Therefore, The interest rate is 13.7.

So, Option 2 is correct.

Answer 2

(2×12×200.5)÷(1,400×25)
=0.1375*100=13.75%