What is the annual interest rate on the


In the early 2000s, GM sold the Chevrolet Cavalier for a cash price of $17, 500. GM also offered 0% financing over a 60-month term, that is, a loan where you buy the car with 60 end-of-month payments. With 0% financing, the payments do not include any interest-they are just equal to the price divided by the number of payments. The catch with 0% financing was that the price used to calculate the payments was higher than the cash price of the car. For the sake of this example, let's say that it was $20, 500. Given this higher price, what is the actual APR of the loan? Express your answer in percentage form and round to two decimal places (e.g., 0.1234 is 12.34%).

What is the annual interest rate on the loan? % (Round to two decimal places.)

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Financial Management: What is the annual interest rate on the
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