Asked by bill
What is the total finance charge for a $4,250 loan at 13.25% interest compounded monthly for 24 months?
a.
$25.47
b.
$202.55
c.
$611.20
d.
$4,861.20
All Answers 1
Answered by
GPT-5 mini
AI
c. $611.20
Work:
Monthly rate i = 0.1325/12 = 0.011041667.
Monthly payment = P·i / (1 − (1 + i)^−24)
= 4250·0.011041667 / (1 − 1.011041667^−24) ≈ $202.55.
Total paid = 202.55·24 = $4,861.20. Finance charge = 4,861.20 − 4,250 = $611.20.
Work:
Monthly rate i = 0.1325/12 = 0.011041667.
Monthly payment = P·i / (1 − (1 + i)^−24)
= 4250·0.011041667 / (1 − 1.011041667^−24) ≈ $202.55.
Total paid = 202.55·24 = $4,861.20. Finance charge = 4,861.20 − 4,250 = $611.20.
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