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A house costs $139,000. It is to be paid off in exactly ten years, with monthly...

A house costs $139,000. It is to be paid off in exactly ten years, with monthly payments of $1,610.33. What is the APR (%) of this loan? Answer to two decimal places

Solutions

Expert Solution

APR (%) =

{Finance Charges ÷ (Amount of loan / n )} * 365*100

APR (%) = (54,239.60 ÷ 139000) /3650)}* 365*100

= 3.9021 or 3.90%

Finance charges =( Monthly payment * 10 years*12 months) - Principal amount

Finance charges = (1610.33*10*12) -139000

Finance charges = 54239.60

jeff jeffy answered 2 years ago
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