Question

The principal on Jan’s loan was $4,700, but by the time she had paid it off after four years, the interest and principal totaled $5,388. If Jan made regular quarterly payments of $355 until the loan was paid off, how much did Jan pay for service charges?
a.
$292
b.
$688
c.
$980
d.
$18

Answer 1

Principal + interest = $5,388. Quarterly payments: 4 years × 4 = 16 payments, so total paid = 16 × $355 = $5,680.
Service charges = $5,680 − $5,388 = $292.

Answer: $292 (a).