   Chapter 13.II, Problem 17RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Calculate the finance charge, the finance charge per $100, and the annual percentage rate for the following installment loans by using the APR table, Table 13-1. Amount Number of Monthly Finance Finance Charge Financed Payments Payment Charge per$100 APR 17. $1,860 18$115.77 __________ ________ __________

To determine

To calculate: The finance charge, finance charge per $100 and annual percentage rate if financed amount is$1,860, number of payment is 18 and monthly payment is $115.75. Explanation Given Information: The financed amount is$1,860, number of payment is 18 and monthly payment is $115.75. Formula used: Follow the steps to compute the annual percentage rate using the APR table. Step 1: The formula for finance charge per$100 can be computed:

Finance charge per $100=Finance charge×100Amount financed Step 2: From table 13-1, note the number of payment column to the number of payments for the loan. Step 3: Note the right number of payment row to the table factor that is closely related to the finance charge per$100.

Total amount of installment payments=Amount financed+finance charge

Step 4: Look at the top of the column for the APR of the loan.

Calculation:

Consider that financed amount is $1,860, number of payment is 18 and monthly payment is$115.75.

Compute the total amount of installment payments by substituting monthly payment and number of payments in the formula:

Total amount of installment payments=monthly payment×number of monthly payments=$115.75×18=$2,083

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