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22 December, 17:32

A house sold for $39,379. The buyer paid 20% down. Monthly interest on the loan was $229.69. What was the annual interest rate on the loan?

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  1. 22 December, 17:36
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    8.75%

    Explanation:

    The annual interest rate will be computed as follows:

    Loan amount = Proportion of loan X Price of house

    Loan amount = 80% X $39,379 = $31,503.2

    Annual interest = $229.69 X 12 = $2,756.28

    Annual interest rate = ($2,756.28 / $31,503.2) X 100%

    = 8.75%
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