Use an annual percentage rate table to solve the problem.
-A newlywed couple bought a washer and dryer for $800. They paid 10% down and then paid 12 Monthly payments of $61.97. Determine the APR of the loan to the nearest one-half of a percent.
A) 6.0%
B) 7.5%
C) 5.5%
D) 8.0%

Question

Quizplus · Accepted Answer

The correct answer is A.The annual percentage rate (APR) is the yearly interest rate charged on a loan. To find the APR, we need to know the amount of the loan, the amount of the down payment, the number of monthly payments, and the amount of each monthly payment.In this case, the amount of the loan is $800, the amount of the down payment is 10%, the number of monthly payments is 12, and the amount of each monthly payment is $61.97.We can use an annual percentage rate table to find the APR. The table shows the APR for different combinations of the amount of the loan, the amount of the down payment, the number of monthly payments, and the amount of each monthly payment.To find the APR for this loan, we look up the row in the table that corresponds to the amount of the loan ($800), the amount of the down payment (10%), the number of monthly payments (12), and the amount of each monthly payment ($61.97). The APR for this loan is 6.0%.

Use an Annual Percentage Rate Table to Solve the Problem