You want to borrow $25,000. For the loan to be paid off, youmust repay $1000...

You want to borrow $25,000. For the loan to be paid off, you must repay $1000 every quarter (4 times per year) for the next 7 years plus $7000 at the end of the 7 years. Based on this, what rate of interest are you paying?

Expert Solution

PV = 25,000

PMT = -1,000

N = 7 * 4 = 28

FV = -7,000

CPT I/Y

I/Y = 2.07885914% per quarter

Interest rate per year = 2.07885914% * 4

Interest rate per year = 0.0831543656

Interest rate per year = 8.31543656%

jeff jeffy answered 2 years ago

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