Answer :

Working notes for the above answer is as under

We have been provided with the information,

take out an $8,000 car loan

that calls for 48 monthly payments

APR of 10 percent,

First of all we will calculate the montly rate as under

montly rate = APR/ No of month in year

= 0.10/12

=.0083333.

Now we will calculate monthly payment using the formulla

then 8000= payment[1-(1.0083333)^-48]/0.00833333

In this case we have:

r = 0.10/12 = 0.008333333

PMT = 0.008333333 * 8000 / (1-(1.008333333)^-48) =

= 66.66666667 / (1-0.671432) =

= 66.66666667 / 0.328568 =

= 202.90

The monthly payment is $202.90

“Loan or Investment Formulas”

solving this I got payment = 202.90

let the annual rate be j

then (1+j)^1=1.00833333^12
1+j=1.1047131
j=0.1047..
or the effective rate is 10.47%