Monthly Payments, Annual Interest Rate Calculator, Test Prep

Monthly Payments and Annual Interest Rate Calculator

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Question

If you buy a television for $650 and agree to pay for it with 24 monthly payments of $33, beginning next month, what annual interest rate, compounded monthly, are you being charged?

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

Explanation

On the BAII Plus, press 24 N, 650 PV, 33 +/- PMT, 0 FV, CPT I/Y. Then press x 12 = to see the answer. On the HP12C, press 24 n, 650 PV, 33 CHS PMT, 0 FV, i.

Then press 12 x to see the answer. The last multiplication by 12 is needed since the calculator returns the periodic interest rate. Make sure the BAII Plus has the

P/Y value set to 1.

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