Anna has negotiated to buy a new SUV for $39,400. She will need to borrow 90% of the purchase price, and she would also like to make equal monthly loan payments over a seven year period.

Required: Answer the following, including variables and calculations to show your work.

(a) If the cost of borrowing is 5.49% per annum, what would her monthly loan payment be?

(b) If the monthly payment is $475 per month, what is the interest rate on the loan above?