Answer:
Monthly payment: 1,573.20
effective rate: 7.55%
Explanation:
We need to calculate the quota of an ordinary annuity
The formula for this is as follow:
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV $91,500.00
time 72 months
rate 0.006083333 the APR is divide into 12 to convert to monthly rate
[tex]91500 \div \frac{1-(1+0.0060833)^{-72} }{0.0060833} = C\\[/tex]
C $ 1,573.199
The effective rate will be an annual rate equivalent to the APR compounding monthly
[tex](1+ r)^{time} = 1+ r_e[/tex]
time 12.00
rate 0.00608333333333333
[tex]1(1+ 0.00608333333333333)^{12} = 1 + r_e[/tex]
1.075493 - 1 = re
re = 0.75493 = 7.55%
