I am currently working on an exam review paper for the test in two days. I haven

Question

I am currently working on an exam review paper for the test in two days. I haven't had any trouble except for this problem. Can somebody please show me the steps to solving this? I thus far have not gotten the right answer after multiple attempts (the review is online).

Your credit union is willing to lend you $32,000 for your home remodeling project. You must
sign a home equity loan that requires you to make payments of $395.00 at the end of each month
for the next 10 years. What is the effective annual interest rate that the credit union offering you,
assuming monthly compounding?

Explanation / Answer

32000= 395PVIFA(x%,120) 81.01266= PVIFA(x%,120) x= .007 or .7% effective annual interest rate= .007x12= .084 or 8.4%

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