The formula relating amount of loan P, annual payments A, number of years n, and annual interest rate i is given as the following equation i(1+i)" A=P (1+ i)n- 1 Assume that you are going to buy a MYR 100,000 car. Maximum monthly payment that you are willing to pay is MYR 1,400. If you are planning to pay the car's loan for 7 years with zero down payment and the range of annual interest rate offered by banks is between 3 to 5 percent, determine the maximum interest rate that you can apply by: (a) Using Bisection Method with error is less than 0.0001 (b) Using Newton-Raphson Method with error is less than 0.0001 (c) If you pay 10 percent down payment and MYR 1,500 per month, how many years would it take to serve the loan of a bank that offer 4 percent annual interest rate? Solve it using Bisection Method. 

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Solving for Maximum Interest Rate We can solve for the maximum interest rate i that allows a monthly payment A of MYR 1400 for a loan of MYR 100000 P ... View the full answer