Answer:
40.08%
Step-by-step explanation:
From the given information;
the annual interest rate can be determined using the formula:
[tex]A =P \times( 1+ \dfrac{r}{n})^{nt}[/tex]
where;
A = amount
P is the installment per period = $625
r = interest rate
nt = number of installments= 14×(12) =168
i = rate of interest per year
[tex]156700 = 625 \times( 1+ \dfrac{r}{12})^{168}[/tex]
[tex]\dfrac{156700}{625} = {(1+ \dfrac{r}{12})^{168}[/tex]
[tex]250.72 = {(1+ \dfrac{r}{12})^{168}[/tex]
[tex]\sqrt[168]{250.72} = {(1+ \dfrac{r}{12})[/tex]
1.0334 = [tex]{(1+ \dfrac{r}{12})[/tex]
1.0334 -1 = r/12
0.0334 = r/12
r = 0.0334 × 12
r = 0.4008
r = 40.08%
Thus; Karla Harby received an interest rate of 40.08%
