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Math Help - Consumer Maths

  1. #1
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    Red face Consumer Maths

    I know this is an easy question but here goes;

    Anjee bought a boat priced at $25000 and paid it off by making equal monthly repayments of $615 over 5 years. Find the annual interest rate that was charged
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  2. #2
    is up to his old tricks again! Jhevon's Avatar
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    Quote Originally Posted by requal View Post
    I know this is an easy question but here goes;

    Anjee bought a boat priced at $25000 and paid it off by making equal monthly repayments of $615 over 5 years. Find the annual interest rate that was charged
    if Anjee paid $615 every month, how much did he/she pay in a year? how much in 5 years? to find the total interest, subtract $25,000 from the 5 year total. then you can find out the annual interest and hence it's percentage
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  3. #3
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    Um, I tried doing that- the total paid was 36900 so therefore the interest was 11900- but then what?

    Can someone solve it for me?
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  4. #4
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    Okay, I used R=I/PT formula but ended up with 6%?, but the answer at the back of the book says it is around 9%.

    Can someone actually *solve* the problem for me- this is pretty urgent!
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  5. #5
    Super Member 11rdc11's Avatar
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    Solve for x

    36900= 25000(1+x)^5


    Compound interest - Wikipedia, the free encyclopedia
    Last edited by 11rdc11; September 13th 2008 at 11:03 PM.
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  6. #6
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    Quote Originally Posted by 11rdc11 View Post
    36900= 25000(1+x)^5

    Solve for x


    Compound
    Formula for calculating compound interest:



    Where,

    P = principal amount (initial investment)
    r = annual nominal interest rate (as a decimal)
    n = number of times the interest is compounded per year
    t = number of years
    A = amount after time t
    I think the book wants me to use simple interest. Okay and the exact answer in the book is 9.52%
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  7. #7
    Super Member 11rdc11's Avatar
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    Ok lets try this then

    \frac{11900}{5}= 2380

    so

    27380=2380+25000


    Using the formula you used

    R=\frac{I}{PT}

    rearrange variables to solve for R


    27380 = 25000(R)
    Last edited by 11rdc11; September 13th 2008 at 11:45 PM.
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