Business maths - HELP.

[xtremeownage]

Further Maths Essential 3rd edition
Chap 21 C,
Q1 a)
Calculate the flat interest rate per annum on each of the following loans.
a) $2400, to be repaid in 30 monthly installments of $90. The answer is 4% p.a but i dont know how to get to it.

b) $1500, to be repaid in 15 monthly installments of $115. = 12 % p.a, dont know how to work it out again.


How am i suppose to do this? i mean the P value isnt even given, im getting pissed as at Business maths and my school is making me do it, help will be very appreciated.

[_avO]

1a should be 5%
PV should be what you get at the start

Just use the formula

[xtremeownage]

FV and PV values would be ?, sorry kinda dont know what they represent and that formula isnt even in my book -.- sigh.

[_avO]

FV = future value (what you pay in the end in total including interest)
PV = present value (what the loan amounted to at the beginning)

eg.
a) FV = 90 x $30 = $2700
    PV = 2400

[xtremeownage]

thanks.

[MJRomeo81]

Or use this formula:

flat interest rate = (100 X Interest) / (P X time in years)

So for your first question, it would be (100X300) / (2400 X 2.5) = 5%