Help with math problem

Question

Your truck loan is $48,000 with an APR of 6% compounded annually for 7 years. The compound interest formula for this loan is A=$48,000(1.06)7. If this loan was changed to be compounded monthly, what would the new annual percentage rate need to be for you to spend the same amount of money?

APR≈5.8%

APR≈6.2%

APR≈8.8%

APR≈5.6%

Answer 1

Let i be the "new APR). we Need (1 + i/4)⁴= 1.06 Take the 4th root of both sides and get

1+i/4 = 1.01467 or i/4 =.01467 multiply both sides by 4 to get 5.87%