Maria and John decide to shop for furnishings for the new house.  They choose items that amount to $5600.00.  The store has 2 fixed installment simple interest loan options for purchasing:   Option 1: 20% down payment

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Maria and John decide to shop for furnishings for the new house.  They choose items that amount to $5600.00.  The store has 2 fixed installment simple interest loan options for purchasing:

 

Option 1: 20% down payment and financing at 5% simple interest per year for 3 years.

What is the finance charge/interest be? Show the work

 

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