Asked by JENNIFER

Joshua borrowed $2,300 for one year and paid $138 in interest. The bank charged him an $15 service charge. If Joshua paid the $2,300 in 12 equal monthly payments, what is the APR? (Round your answer to 1 decimal place
Answered by Ms. Sue
138/2,300 = 0.06 = 6%

Answered by JENNIFER
After visiting several automobile dealerships, Richard selects the car he wants. He likes its $18,500 price, but financing through the dealer is no bargain. He has $3,700 cash for a down payment, so he needs an $14,800 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $14,800 for a period of four years at an add-on interest rate of 11 percent.


What is the total interest on Richard’s loan?
What is the monthly payment?
What is the annual percentage rate (APR)? (Round your answer to 2 decimal places.)
What is the total cost of the car?
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