how much is the effective interest of 500,000.00 which is to be paid 10,450 monthly in five years. Given Principal is 500,000.00; Total interest in 5 years is 124,300.00
Given
Principal: 500, 000
Interest: 124, 300
Time: 5 years
Rate:?
Interest (I)=PRINCIPAL(P)*RATE(r)*TIME(t)
since the unknown is rate
We will formulate the formula
r=I/ Pr
And substitutes the formula
r=124, 300/500, 000(5)
r=1.24*100 %
r=124%
