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## Homework Statement

A car dealer sells a new car for $18,000. He also offers to sell the same car for monthly payments of $375.00 for five years. What monthly rate is this dealer charging?

## Homework Equations

A = [R(1 - (1 + i))^-60] / i

where A = the present value, R = the monthly payment, i = the interest rate, n = the number of monthly payments

Replacing i by x, show that 48x(1 + x)^60 - (1 + x)^60 + 1 = 0.

## The Attempt at a Solution

I thought that, "Replacing i by x, show that 48x(1 + x)^60 - (1 + x)^60 -1 = 0.", seemed to suggest that they wanted me to solve for i (or x), but in hindsight I don't think that's what I need to do. I don't know where to start now. [edit] Or I suppose rather that I'm just supposed to set it equal to 0 somehow. In which case I guess I don't know what they're doing to (1 + x)^60.[edit]

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