Question: You are considering buying an Audi for $60,000, and your financing is quoted at 8% APR with monthly compounding. a. What rate do you need

You are considering buying an Audi for $60,000, and your financing is quoted at 8% APR with monthly compounding.

a. What rate do you need in order to use one of the following annuity formulas to find the monthlypayments?

PV(annuityofCfornperiodswithinterestrater)=C1r11(1+r)norPV(growingperpetuity)=Crg

b. What is the effective annual rate of interest for thisfinancing?

The rate that should be used for the formulas is r=

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