Answer:
Annual rate of interest will be 132.876 %
Step-by-step explanation:
We have given amount which he has to pay A = $611.03
He does a monthly payment of $26.17
So principle amount P = $26.17
Time = 2.5 years
As payment is done monthly so time period = 12×2.5 = 30 periods
Future amount is given by
[tex]A=P(1+\frac{r}{100})^n[/tex]
[tex]611.03=26.17(1+0.01r)^{30}[/tex]
[tex](1+0.01r)^{30}=23.3484[/tex]
[tex](1+0.01r)=23.3484^{\frac{1}{30}}=1.110[/tex]
[tex]0.01r=1.110-1=0.11[/tex]
[tex]r=11.07[/tex] %
So annual rate will be 11.07×12 = 132.876%
Annual rate of interest will be 132.876 %
