Answer:
The effective rate on the loan is 13/18% or 0.722%
Explanation:
36 monthly payments of $700 will give = 700*36=$25200
Amount= $25200
Principal= $20000
Interest= amount - principal
Interest= 25200 -20000
=$5200
Rate= (100* interest)/principal*time
= (100*5200)/(20,000*36)
=13/18 %
= 0.722%
The effective annual rate on the loan is 0.722%
