You really want to buy a used car for $11,000, but can only afford $200 a month. What interest rate would you need to find to be able to afford the car, assuming the loan is for 60 months? is the answer 0.03% which formula would you use? I am doing too many to get the correct answer.

  3.48%

Step-by-step explanation:

Interest rate is the one variable in the amortization formula that cannot be solved for directly. An iterative or graphical approach is needed. There is no formula. Financial calculators, financial apps, and spreadsheets are all able to do this calculation.

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In the attached, we have used a graphing calculator to find the value of interest rate (in %) that makes the loan payment be $200 for a loan of $11,000. It shows us the rate is 3.48%. (A financial calculator confirms this value.) The x-intercept in the graph is the interest rate that makes the difference between the payment and $200 be zero. In our formula for the payment, we have used t for years. 60 monthly payments is 5 years.