Using the add-on method, calculate the APR of a loan for $12,450 at 11% for 2...

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Using the add-on method, calculate the APR of a loan for $12,450 at 11% for 2 years. (Do not round intermediate calculations.

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Answer 1

Answer #1

Ans To calculate the APR we will get the monthly EMI payment per month i.e 580.27

Enter Values			Loan Summary
	Loan Amount	$ 12,450.00		Scheduled Payment	$ 580.27
	Annual Interest Rate	11.00 %		Scheduled Number of Payments	24
	Loan Period in Years	2		Actual Number of Payments	24
	Number of Payments Per Year	12		Total Interest	$ 1,476.42

APR Formula and Calculation APR = ( ) 365) 2100 Fees + Interest Principal APR = x 365 x 100 where: Interest = Total interest

Total Interest =1476.42

Total Loan=12450

Interest rate= 11%

APR= ((1476.42 / 12450/730)*365)*100= 5.92939759

APR =5.92939759 * 2= 11.8587952 %

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