Jen Anderson takes out a mortgage for $120,000. This is a loan of 30 years at $500 per month. This gives a total interest cost of $60,000. What is the APR using the formula?

Question

Mathematics

Devyn Sanford

16 July, 08:10

Jen Anderson takes out a mortgage for $120,000. This is a loan of 30 years at $500 per month. This gives a total interest cost of $60,000. What is the APR using the formula?

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Answers (1)

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Rubi Gardner · Answer 1

In order to get the APR what you need to do is

1) Divide the finance charge by the loan amount 2) Multiply the result by 365 3) Divide the result by the term of the loan 4) Multiply the result by 100. After that you need to find the interest per month. for example if the annual interest rate is 2.91% then 2.91/1200 = > 0.002425/month. in that case the rate will be 2.95%. por in the case of this problem and after you do your calculations, the answer must be 3.3%