Question

) I bought an item for $2,872.668. I did not have the money at the time...

) I bought an item for $2,872.668. I did not have the money at the time so the buyer told me
I could make 3 easy payments $1,000. The first now and then at the end of each of the next 2 years.
What was the effective annual interest rate I was charged?

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Answer #1

Rate per month is 4.50%

Effective annual interest rate:

= (1+4.50%)^12-1

= 69.59%

Hence, Effective annual interest rate was 69.59%

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