An auto dealership is advertising that a new car with a sticker price of $$35,208$ is on sale for $$25,995$ if payment is made in full, or it can be financed at $"0\%$ interest" for $72$ months with a monthly payment of $$489.$ Note that, $72$ payments x $$489$ per payment $=$ $$35,208,$ which is the sticker price of the car.

In practice, the financing is$,$ therefore, not $0\%,$ as you would pay $$35,208$ over $72$ payments of $$25,995$ now. By allowing you to pay for the car in a series of payments $($starting one month from now$)$ rather than $$25,995$ now, the dealer is effectively loaning you $$25,995.$ If you choose the financing option, what is the effective interest rate that the auto dealership is earning on your loan?

Hint: Create a cell for the effective rate r and put any number in it $($between zero and one, of course$).$ Then, discount each one of the payments back to current dollars $($maybe create a new column current dollars$).$ To discount a payment, remember that $$1000$ given to you in k months at a rate r is worth $$1000/(1+$r$)^$k today. For example, $$1000$ years in $2$ month at a rate of $1\%$ per month is worth $$1000/(1+1\%)^2=$ $$980\mathrm{.}29.$ Finally, use Goal Seek to find the interest rate that makes the sum of all payments in current dollars, that is$,$ the present value be $$25,995$