Question

) 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?

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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