financing furniture that costs $4200.00 with a two year installment loan. The loan requires a 12% down payment and 24 equal monthly payments of $195.00. According to this information, what would be the finance charge on the loan?

Answer 1

4200 * 0.12 = 504

4200 - 504 = 3696 amount financed

24 * 195 = 4680 amount to be paid

4680 - 3696 = 984 interest charges

984 / 3696 = 0.266 = 27% finance charge