Explanation Given Information: The amount financed is $ 18 , 600 , number of payments is 72 and monthly payment is $ 421.08 . Formula used: When the table to compute APR is not given, the annual percentage rate (APR) is computed by the formula: APR = 72 I 3 P ( n + 1 ) + I ( n − 1 ) Where, I is finance charge on the loan, P is principal or amount financed and n is number of monthly payment of the loan. Calculation: Consider that amount financed is $ 18 , 600 , number of payments is 72 and monthly payment is $ 421.08 Compute the total amount of installment payments by substituting monthly payment and number of monthly payments: Total amount of installment payments = Payment per month × Number of monthly payments = $ 421.08 × 72 = $ 30 , 317.76 Hence, the total amount of installment payment is $ 30 , 317.76 . Compute the finance charge by substituting total amount of installment payment and amount financed in the formula: Finance charge = Total amount of installment payment − Amount financed = $ 30 , 317

Contemporary Mathematics for Business and Consumers

7th Edition

ISBN: 9781285189758

Author: Robert Brechner, George Bergeman

Publisher: Cengage Learning

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Chapter 13.II, Problem 22RE

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To calculate: The finance charge and annual percentage rate if amount financed is $18,600, number of payments is 72 and monthly payment is $421.08.

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Chapter 13.II, Problem 21RE

Chapter 13.II, Problem 23RE

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Chapter 13 Solutions

Contemporary Mathematics for Business and Consumers

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The finance charge and annual percentage rate if amount financed is $ 18 , 600 , number of payments is 72 and monthly payment is $ 421.08 .

Solution Summary: The author calculates the finance charge and annual percentage rate if the amount financed is 18,600.

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To calculate: The finance charge and annual percentage rate if amount financed is $18,600, number of payments is 72 and monthly payment is $421.08.

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Chapter 13 Solutions