A local bank offers a customer a 2-year car loan of $10,000 as follows: Money to

Question

A local bank offers a customer a 2-year car loan of $10,000 as follows:

Money to pay for car : $10,000
Two years' interest at 7% : 2 x 0.07 x 10,000 : $1400 (11,400 total)
24 monthly payments : 11400 / 24 = $475.00

The first payment must be made in 30 days. What is the nominal annual interest rate the bank is receiving?

That's exactly what the book says. I'm not very sure at all about how to go through this problem - a step-by-step explanation and answer would really help and be given lifesaver!

Explanation / Answer

our nominal interest rat is equal to 140/1000=.14 or 14%

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