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In: Finance

If you borrow $26,000 with monthly payments of $550 over 5 years, what annual rate are...

If you borrow $26,000 with monthly payments of $550 over 5 years, what annual rate are you paying?

A. 8.18% B.

8.41%

C. 9.81%

D. 8.51%

Solutions

Expert Solution

c.9.81%

We can use the Excel function= RATE() for the computation

Loan Amount =$26,000

Number of Periods=60

Compounding Periods per year =12

Monthly Payment=$550

The interest rate can be calculated in Excel using the rate function.The formula is=RATE(B2,B4,-B1)*12

Interest rate =9.81%

jeff jeffy answered 1 year ago
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