You are considering buying a $ 50,000 car. The dealer has offered you a 13.6 percent loan

Question:

You are considering buying a $ 50,000 car. The has offered you a 13.6 percent loan with 30 equal monthly payments. On questioning him, you find that the interest charge of $ 17,000 (or 0.136 × $ 50,000 × 2.5 years) is added to the $ 50,000 for a total amount of $ 67,000. The payments are $ 2,233.33 a month ($ 67,000 ÷ 30). What is the approximate effective annual interest rate?

Dealer
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...