Answer:
rate = 9.91 %
Explanation:
given data
borrow amount = $71,000
monthly payments = $1,400
time = 66 month
solution
we get here rate by apply present value formula that is
present value = [tex]\frac{monthly\ payments\ (1-(1+r)^{-t}}{r}[/tex] .....................1
$71,000 = [tex]\frac{1400\ (1-(1+r)^{-66}}{r}[/tex]
50.71 = [tex]\frac{ (1-(1+r)^{-66}}{r}[/tex]
solve it we get
r = 0.8264 % monthly
rate = 0.8264 × 12 yearly
rate = 9.91 %
