Question

 customer borrows 4000 under a consumer credit load,repayments are calculated to give an APR of 15.4%.Instalments are paid monthly in arrears for 5 years.Calculate the flat rate of intrest

Answer 1

Loan amount P=4000

Interest rate per annum r=15.4%

Total number of instalments $= 5\times 12=60$

Flat rate of interest $=\dfrac{ P\times r\times 5}{60}=\dfrac{4000\times 15.4\times 5}{60}=5133.3$