Answer
$11.68\%$
Work Step by Step
Step 1. Identify the given quantities: current value $A_p=189.99$, each payment $R=10.50$, total number of payments $n=20$, monthly compounding.
Step 2. Assume the interest rate is $r$, we have the per period rate as $i=r/12$, and we have the equation:
$A_p=R\frac{1-(1+i)^{-n}}{i}$ or $189.99=10.5\times\frac{1-(1+r/12)^{-20}}{r/12}$ which gives:
$1.5079r-1+(1+r/12)^{-20}=0$
Step 3. To solve for $r$, graph the function as shown in the figure and we can find a zero at $(0.1168,0)$ which gives the interest rate as $r=11.68\%$
