Answer:
The APR for the loan 15.6%
Step-by-step explanation:
From the given information:
The annual percentage can be calculated by using the formula:
[tex]APR = \dfrac{2 \ Nr}{N +1}[/tex]
where;
N = number of payments = 3 years = 12 × 3 = 36 months
r = add-on interest rate = 8% = 0.08
Replacing our value to calculate the APR, we get:
[tex]APR = \dfrac{2 \times 36 \times 0.08}{36 +1}[/tex]
[tex]APR = \dfrac{5.76}{37}[/tex]
APR = 0.155675
APR ≅ 15.6%
