Answer:
3%
Step-by-step explanation:
Before we are able to calculate for the interest rate, we need to find the total accrued amount.
We can find the accrued amount by simply multiplying the monthly payment to the number of months in 12 years.
12 year = 144 months
Monthly Payment = $680
A = 680 * 144
A = $97920
Now that we have the total accrued amount, we can use the formula:
[tex]r=(\dfrac{1}{t})(\dfrac{A}{P}-1)[/tex]
A = 97920
P = 72000
t = 12
Now let's substitute our values.
[tex]r=(\dfrac{1}{12})(\dfrac{97920}{72000}-1)[/tex]
[tex]r=(\dfrac{1}{12})(1.36-1)[/tex]
[tex]r=(\dfrac{1}{12})(0.36)[/tex]
[tex]r=0.03[/tex]
We then multiply the value of r by 100 to get the percentage value.
0.03 x 100 = 3%
Alexia's interest rate is 3%.
