Chapter 13, Problem 9AT

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Buster Blaster Recording Studio purchased a new digital recording console for $28,600. A down payment of $5,000 was made and the balance financed with monthly payments of $653.92 for 48 months.

**a.** What is the finance charge on the loan?

**b.** Use Table 13-1 to find what annual percentage rate was charged on the equipment loan.

(Use the closest value found in Table 13-1 to find your result.)

**(a)**

To determine

**To calculate:** The finance charge if Buster Blaster Recording Studio purchased a new digital recording console for

Explanation

**Given Information:**

Buster Blaster Recording Studio purchased a new digital recording console for

**Formula used:**

The amount financed is computed by subtracting down payment from purchase price,

The finance charge per

From table 13-1, note the number of payment column to the number of payments for the loan.

Note the right number of payment row to the table factor that is closely related to the finance charge per

Look at the top of the column for the APR of the loan.

**Calculation:**

Consider purchase cost is

Compute the amount financed by substituting purchase cost to

**(b)**

To determine

**To calculate:** The annual percentage rate (APR) if Buster Blaster Recording Studio purchased a new digital recording console for

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