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Chuong Ngo borrows $2700 from a bank that advertises a 6% simple interest rate and repays...

Chuong Ngo borrows $2700 from a bank that advertises a 6% simple interest rate and repays the loan in three equal monthly payments. Estimate the APR. Round to the nearest tenth of a percent. Use the Approximate Annual Percentage Rate Formula.

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Answer #1

Approximate Annual Percentage Rate Formula.

n = total number of montly payments = 3

p = principal amount = $ 2700

r = rate of interest in decimal = 0.06    ( We converted 6 % in to decimal 6 / 100 = 0.06 )

We convert the value of APR in to percentage That is we multiply 0.09 by 100 (0.09*100 = 9 % )

Final answer :-

Estimate of the APR = 9 %

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