ABSTRACT
An item or service costs an amount C and is to be paid off over time in equal installment payments. The difference between the cost C and the total amount paid in installments is the interest I. The interest rate r is the amount of interest divided by the cost and the time of the loan T (usually expressed in years):
r = I/CT
Example An item purchased and costing $4,000 is to be paid off in 18 equal monthly payments of $249.
