In: Finance
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? |
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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%