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12 March, 03:23

A finance company offers a "12% plan". The cost of a one-year loan is 12%, and this cost is added to the loan. This total is then divided by 12 to get the monthly payments. Calculate the effective interest rate being charged for a loan of $9,000.

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  1. 12 March, 04:43
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    840

    Explanation:

    Interest rate=12%

    Interest for $9000 = 12% * 9000

    Interest for $9000 = 12/100 * 9000

    Interest for $9000 = $1080

    Interest + principal loan amount = $9000 + $1080 = $10080

    Monthly payment = $10080/12months = $840
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