Find the APR rounded to the nearest tenth of a percent for t

Find the APR (rounded to the nearest tenth of a percent) for the loan.

Purchase a living room set for $1,300 at 9% add-on interest for 4 years. Yes but it said add on insterest for 4yrs how much it is APR

Solution

Answer:-

Calculation of APR

APR = m[(1 + EAR)1/m– 1]

m = months = 12*4 = 48 months

EAR = 0.09 (9/100)

so APR = 48{(1+0.09)^1/48-1}

= 48{ (1.0018333-1)

= 48*0.0018333

= 0.087998

= 0.088*100 ( in percentage )

= 8.8%