The owner of an automobile repair center purchased new electronic diagnostic equipment for $15,000. He paid down and then paid 60 monthly payments of $296.91. Determine the APR of the loan to the nearest one-half of a percent.

Question

Justin David

Business

1 February, 13:52

The owner of an automobile repair center purchased new electronic diagnostic equipment for $15,000. He paid down and then paid 60 monthly payments of $296.91. Determine the APR of the loan to the nearest one-half of a percent.

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Jaidyn Mullins · Answer 1

Answer: 11.5%

Explanation:

Annual Percentage Rate (APR) can be defined as the annual rate of percentage earned via investment or charged for borrowing a particular loan.

APR = ((Fees+Interest/principal) / n) * 365) * 100

where:

Interest=Total interest paid over life of the loan

Principal=Loan amount

n=Number of days in loan term

Using the formulae, if properly calculated, the annual percentage rate (APR) of the loan to the nearest one-half of a percent would be 11.5%