Question

Alan Cohl obtained an installment loan for $3,560. His finance charge is $308.56, and he will make 18 monthly payments. What is the APR?

Answer 1

Annual percentage rate = monthly rate * 12
total interest = 308.56*18-3560 = 1994.08
monthly interest = 1994.08/12 = 166.173
monthly rate = 166.173/3560 =4.7%
APR = 4.7*12 = 56.01%