You borrow 95000 the annual loan payments are 484683 for 30

You borrow $95,000; the annual loan payments are $4,846.83 for 30 years. What interest rate are you being charged? Round your answer to two decimal places.

Solution

Let interest rate be x%

At this rate;present value of loan payments=$95000

$95000=4,846.83/1.0x+4,846.83/1.0x^2+4,846.83/1.0x^3+...............+4,846.83/1.0x^30

Hence x=interest rate=3%(Approx).