Calculate (a) the amount financed, (b) the total finance charge, and (c) APR by table lookup. (Use Table 14.1.) Purchase price of a used car $ Down payment 4,095 $ 95 Number of monthly payments 60 Amount financed Total of monthly payments $ 5,844 Total finance charge APR
Calculate (a) the amount financed, (b) the total finance charge, and (c) APR by table lookup. (Use Table 14.1.) Purchase price of a used car $ Down payment 4,095 $ 95 Number of monthly payments 60 Amount financed Total of monthly payments $ 5,844 Total finance charge APR
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Problem Statement:**
Calculate (a) the amount financed, (b) the total finance charge, and (c) APR by table lookup. (Use Table 14.1)
**Data Provided:**
| Description | Value |
|------------------------------- |---------------------|
| Purchase price of a used car | $4,095 |
| Down payment | $95 |
| Number of monthly payments | 60 |
| Total of monthly payments | $5,844 |
**Columns to Calculate:**
- Amount financed
- Total finance charge
- APR
This table illustrates a financial calculation related to purchasing a used car, involving calculation of the amount financed, the total finance charge, and the APR using a specified table lookup. The purchase price of the vehicle, the down payment made, and the total payments over the loan period are provided.
Transcribed Image Text:**Annual Percentage Rate (APR) Table**
This table displays the finance charge per $100 of amount financed, categorized by the number of payments and various annual percentage rates (APR), ranging from 10.00% to 13.75%.
- **Columns:** Each column represents a different APR: 10.00%, 10.25%, 10.50%, 10.75%, 11.00%, 11.25%, 11.50%, 11.75%, 12.00%, 12.25%, 12.50%, 12.75%, 13.00%, 13.25%, 13.50%, and 13.75%.
- **Rows:** Each row corresponds to the number of payments, spanning from 1 to 38.
- **Cell Data:** Each cell indicates the finance charge calculated per $100 of the amount financed, determined by intersecting the number of payments with the chosen APR.
For example:
- With 1 payment at an APR of 10.00%, the charge is $0.83.
- With 12 payments at an APR of 12.50%, the charge is $6.76.
- With 24 payments at an APR of 13.75%, the charge is $13.95.
This table aids in determining how finance charges will vary with different APRs and payment schedules, important for budgeting and financial planning.
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