You have arranged for a loan on your new car that will require the first payment...

You have arranged for a loan on your new car that will require the first payment today. The loan is for $35,000, and the monthly payments are $655.

If the loan will be paid off over the next 62 months, what is the APR of the loan?

APR

3.12selected answer incorrect

Solutions

Expert Solution

Using a financial calculator

Set the mode to BGN mode => 2nd BGN => 2nd SET => 2nd QUIT

PV = -35000

FV = 0

PMT = 655

N = 62

cpt I/Y, we get I/Y= 0.50183

Hence, the APR = 12*0.50183

APR = 6.02196% = 6.02%

jeff jeffy answered 2 years ago

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