Respuesta :
The interest rate paid on the loan is 3.48330378% p.a.
We can use the '=rate' function in excel to solve for the interest rate.
We need to put in the following parameters :
nper (no. of periods) = 360 (30 × 12 since EMI is given)
pmt = $950 (pmt refers to constant payments made at regular intervals)
pv = $212,000 (refers to the loan amount)
We need to enter 'pv' as a negative number since excel treats it as an outflow.
So, the formula in excel will look like this
=RATE(30*12,950,-212000)
This gives us an interest rate of around 0.290% per month.
We simply multiply by 12 to arrive at the nominal annual interest rate.
The interest rate on the loan will be 2.044%.
What is an interest?
Interest is a charge paid by the borrower on loan as a percentage of the principal amount. It is paid over the principal repayment.
The interest percentage can be calculated as follows:
[tex]\rm Interest\:percentage = \dfrac{Interest\:per\:year}{Principal}\times100[/tex]
The above formula will calculate the interest rate per annul.
Given:
Monthly payment is $950
Tenure is 30 years
Loan principal is $212,000
The total payment made along with interest will be:
[tex]\rm Total\:payment = \$950\times12\times 30\\\rm Total\:payment = \$342,000[/tex]
The interest amount paid will be:
[tex]\rm Interest= Total\:payment -Principal\\\\\rm Interest=\$342,000-\$212,000\\\\\rm Interest=\$130,000[/tex]
The interest per year will be:
[tex]\rm Interest \:per\:year = \dfrac{Total\:interest}{30\:years}\\\\\rm Interest \:per\:year = \dfrac{\$130,000}{30}\\\\\rm Interest \:per\:year = \$4333.33[/tex]
The interest percentage per year will be:
[tex]\rm Interest\:percentage = \dfrac{Interest\:per\:year}{Principal}\times100\\\\\rm Interest\:percentage = \dfrac{4,333.33}{212,000}\times100\\\\\rm Interest\:percentage = 2.044\%[/tex]
Therefore the rate of interest is 2.044%.
Learn more about interest here:
https://brainly.com/question/2883618
