Shania would like to finance the purchase of her car. If she borrows $20 000 as a five-year loan from the bank and the bank requires her to make end-of- month payments of $400, what is the annual interest rate on her loan if interest is compounded monthly and the loan is completely paid off at the end of the five-year period? (I/Y)Shania would like to finance the purchase of her car. If she borrows $20 000 as a five-year loan from the bank and the bank requires her to make end-of- month payments of $400, what is the annual interest rate on her loan if interest is compounded monthly and the loan is completely paid off at the end of the five-year period? (I/Y)

P/Y = 12, C/Y = 12, N = 60, I/Y = ?, PV = 20 000, PMT = -400, FV = 0 The annual interest rate on Shanias loan is 7.42% compounded monthly.

How did they get this answer? Show calculations and steps by hand. Thanks