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Mathematics, 25.02.2020 02:21 michellemitchel
Alan writes the equation A=500(1.25)t to figure out how much it will cost him for a one-year loan of $500 with an interest rate of 25% compounded only once. He wants to determine the annual percentage rate (APR) for a loan that would cost the same amount overall, if it is compounded monthly, instead of only once. Which equation should he use, and what is the APR?
A≈500(1.25)12tAPR≈1.88%
A≈500(1.0188)12tAPR≈22.56%
A≈500(1.0188)12tAPR≈1.88%
A≈500(1.2512)112tAPR≈14.55%
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Alan writes the equation A=500(1.25)t to figure out how much it will cost him for a one-year loan of...
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