A financial company charges 2% per month on loans of $500 or less. Using the direct ratio formula, find the interest rate charged on a $500 loan if it will be repaid in 24 equal monthly payments.

To find the interest rate charged on a $500 loan that will be repaid in 24 equal monthly payments, we can use the formula for the equal monthly payment on a loan, which includes both principal and interest. The formula is: $$PMT = \dfrac{P \cdot r \cdot (1 + r)^n}{(1 + r)^n - 1}$$ Where: - (PMT) is the monthly payment - (P) is the principal loan amount ($500 in this case) - (r) is the monthly interest rate (which we want to find) - (n) is the number of monthly payments (24 in this case) We know that the monthly payment is equal to the total loan amount divided by the number of payments, so: $$PMT = \dfrac{\text{Total Loan Amount}}{\text{Number of Payments}} = \dfrac{500}{24}$$ Now, we can use this and solve for (r): $$\dfrac{500}{24} = \dfrac{500 \cdot r \cdot (1 + r)^{24}}{(1 + r)^{24} - 1}$$ To solve for (r), you may need to use numerical methods or a calculator since this equation is a bit complex. Approximating the value of (r), you would find that the monthly interest rate is approximately 0.0296, or about 2.96%. So, the interest rate charged on a $500 loan that will be repaid in 24 equal monthly payments is approximately 2.96% per month.