Question

kristen replays 425$ per month over 5 years on her car loan of 20,000. what flat rate of interest was kristen being charge

Answer 1

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Answer on Question #76021 – Math – Algebra Question

Kristen replays 425$ per month over 5 years on her car loan of 20,000. What flat rate of interest was Kristen being charge.

Solution

$$P = \$20000$$ $$t = 5 \text{ years}$$

Total repayments = $425 × 12 × 5 = $25500

Interest paid = $25500 – $20000 = $5500

$$I = Prt \Rightarrow r = \frac{I}{Pt}$$ $$r = \frac{\$5500}{\$20000(5)} \cdot 100\% = 5.5\% \text{ p.a.}$$

Answer: flat rate of interest is 5.5% per annum.