A bank offers a 24-month installment loan with an APR of 10%. Alicia wishes to use the loan to finance a sailplane for $42,800. After first using Table 13-1 to find the finance charge, calculate the monthly payment.
3 answers
What is the finance charge?
Working this without archaic tables, instead using modern technology .... (a basic scientific calculator)
i = .10/12 = .0083333...
n = 24
42800 = paym(1 - 1.0083333...^-24)/.0083333...
paym = 1975.00
using your tables:
42800/100 = 428
charge per 100 for 24 months = 10.75
so total interest charge = 10.75(428) = 4601
amount repayable = 42800+4601= 47401
divided into 24 payments ----47401/24 = 1975.04
compare with proper answer above.
i = .10/12 = .0083333...
n = 24
42800 = paym(1 - 1.0083333...^-24)/.0083333...
paym = 1975.00
using your tables:
42800/100 = 428
charge per 100 for 24 months = 10.75
so total interest charge = 10.75(428) = 4601
amount repayable = 42800+4601= 47401
divided into 24 payments ----47401/24 = 1975.04
compare with proper answer above.
(amount financed + finance charge)/#months of loan, same answer! thank you so much,.
1 answer