6. The Lucky Loan Company will lend $10000 with terms that require you to pay off the loan in 36 monthly installments of $500 each. What is the effective annual interest rate that the company is charging you?

20%

Step-by-step explanation:

If it requires you to pay 36 monthly instalments, then the fastest time you can pay it off is 3 years.

So, we find how much money is paid in a year in such a way = 500 x 12 = 6000

If this amount is paid for 3 years, you end up paying = 6000 x 3 = 18000

This is 18000-10000 = 8000 more than what was leant to you.

Now, to find the interest the intrested rate, we use the formula for simple interest:

(P x R x T)divided by 100

P = principle amount

R = rate

T = time.

So, 10000 x 3 x R divided by 100 = 6000

Rearrange and solve to find

R = 20%

Hope this helps

can you add an image ?

step-by-step explanation: