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(True Life) I wanted to buy an Apple phone. The company would charge me $499.00 for...

(True Life) I wanted to buy an Apple phone. The company would charge me $499.00 for a new phone. Alternatively, AT&T was willing to sell me the phone if I made monthly payments of $30.00 (no service included) for 2.5 years (30 months). What was the annual percentage rate (APR) being charged by AT&T? (Hint: First calculate the monthly rate and then APR) Group of answer choices 1.99 percent 23.83 percent 62.14 percent 4.32 percent 51.88 percent

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Answer #1
Present Value Of An Annuity
= C*[1-(1+i)^-n]/i]
Where,
C= Cash Flow per period
i = interest rate per period
n=number of period
499= $30[ 1-(1+i)^-30 /i]
i = 0.04323
Monthly rate = 4.323%
APR = 4.323%*12
=51.88%
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