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You want to purchase a new motorcycle that costs $29,800. The most you can pay each month is $510 over the life of the 78-month loan. What is the highest APR that you could afford

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darwinvillar

Answer:20,5369%

Explanation:We know APR is the Annual Percentage Rate that is paid over a loan. If we are to pay during 78 months at most $510 each month, then we could pay in total 510*78=$39780 in the course of the six years and a half that constitute the 78 months. This means that yearly we can pay in interest $39780/6,5=$6120 each year, this represents the interest over the loaned money, i.e., the $29800. Then the APR is

[tex]\\\frac{6120}{29800} =20,5369\%[/tex] annualy or 1,71141% monthly and it is the highest APR you could afford, 20.5369%

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