Example: Interest Rate

Someone obtains a $20,000 loan to buy a car. They make $350 a month payments for 70 months. Here, the interest rate of the loan is computed. 

import com.imsl.finance.*;
import java.text.NumberFormat;

public class rateEx1 {

    public static void main(String args[]) {
        double rate;
        int nper = 70;
        double pmt = -350.;
        double pv = 20000;
        double fv = 0.;
        int when = Finance.AT_BEGINNING_OF_PERIOD;

        rate = Finance.rate(nper, pmt, pv, fv, when) * 12;
        NumberFormat nf = NumberFormat.getPercentInstance();
        nf.setMaximumFractionDigits(2);
        System.out.println("The computed interest rate on the loan is "
                + nf.format(rate));
    }
}

Output

The computed interest rate on the loan is 7.35%
Link to Java source.