The monthly interest rate you are paying on the loan is 3.2 %
The APR is 38.4%
Given that,
amount borrowed PV = $300,000
equal monthly payment = $3,950.37
Term in year = 20
So, total number of payment = 20*12 = 260
The interest rate need to be calculated on financial calculator as;
FV = 0
PV = 300000
PMT = -3950.37
N = 260
R= 3950.37/12/100
Monthly rate = 3.2%
APR = 12* monthly rate = 12*3.2 = 38.4%
Therefore, The monthly interest rate you are paying on the loan is 3.2%
The APR is 38.4%
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See full question below
you have just borrowed $300,000 to buy a condo. you will repay the loan in equal monthly payments of $3,950.37 over the next 20 years.
a. What monthly interest rate are you paying on the loan?'
b. What is the APR?
