1. ## 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

2. Originally Posted by requal
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

3. 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?

4. 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!

5. Solve for x

$36900= 25000(1+x)^5$

Compound interest - Wikipedia, the free encyclopedia

6. Originally Posted by 11rdc11
$36900= 25000(1+x)^5$

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%

7. 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

$27380 = 25000(R)$