Question

Calculate the amount financed, the finance charge, and the monthly payments for the following add-on interest loan. Do not round intermediate calculations. Round your answers to the nearest cent.

Purchase (Cash) Price	Down Payment	Amount Financed	Add-on Interest	Number of Payments	Finance Charge	Monthly Payment
$51,500	30%	$	6.2%	60	$	$

Answer for amount financed, Finance charge and monthly payment. Thumbs Up for a correct answer!!!

Answer 1

Answer :

Calculation of Amount financed:

Amount financed = Purchase * ( 1 - down payment )

= $51,500 * ( 1 - 30% )

= $36,050

Calculation of Finance charges:

Finance charges = Amount financed * Add on interest * 60 / 12

= $36,050 * 6.2% * 60 / 12

= $11,175.50

Calculation of Monthly payment:

Monthly payment = ( Amount financed + Finance charges ) / 60

= ( $36,050 + $11,175.50 ) / 60

= $787.09

Purchase (cash) price	Down payment	Amount Financed	Add-on Interest	Number of payments	Finance charge	Monthly payment
$51,500	30%	$36,050	6.2%	60	$11,175.50	$787.09