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You want to borrow $98,000 from your local bank to buy a new sailboat. You can...

You want to borrow $98,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $2,100, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 54-month APR loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

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Answer #1

Ans 6.54%

P = Regular Payments
PV = Loan Amount
r = rate of interest
n = no of periods
P = r (PV)
1 - (1 + r )-n
2100 = (r%/12)*98000
1 - (1 / (1 + r%/12)^54))
2100 / 98000 = (r%/12)
1 - (1 / (1 + r%/12)^54))
0.0214285714285714 = (r%/12)
1 - (1 / (1 + r%/12)^54))
r = 6.54%
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