Question

Barry bought a new television set for ​$415. He paid nothing down but agreed to payments...

Barry bought a new television set for ​$415. He paid nothing down but agreed to payments of  $ 36.39 per month for 12 months. Find the finance charge and the annual percentage rate for the loan using the APR table. LOADING... Click the icon to view the annual percentage rate table. The finance charge is ​$ -------. The annual percentage rate is ---------​%.

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Answer #1

The finance charge is $ 21.68 and annual percentage rate is 9.5 %

Explanation:

Total finance charge = (Amount of monthly payment x Number of payments) – Amount of loan

                               = ($ 36.39 x 12) - $ 415

                               = $ 436.68 - $ 415 = $ 21.68

Finance charge per $ 100 = ($ 21.68/ $ 415) x $ 100

  = 0.05224096386 x $ 100 = $ 5.22

As per APR table, if

Number of monthly payments, n = 12

Finance charge for $ 100, h = $ 5.22

Then Annual Percentage Rate = 9.5 %

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