Chapter 13.II, Problem 27RE

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

### Contemporary Mathematics for Busin...

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

# Calculate the finance charge and the monthly payment for the following loans by using the APR table, Table 13-1. Amount Number of Table Finance Monthly Financed Payments APR Factor Charge Payment 27. $5,000 48 13.5%$29.97 $1,498.50$135.39

To determine

To calculate: The table factor, finance charge and monthly payment if annual percentage rate (APR) is 13.5%, installment loan for 48 months and amount financed is $5,000. Explanation Given Information: The annual percentage rate (APR) is 13.5%, installment loan for 48 months and amount finances is$5,000.

Formula used:

Follow the steps to compute the finance charge and monthly payment through APR tables.

Step 1: Through APR table, scan the table factor at the intersection of the APR column and the number-of-payment row. This will represent the finance charge per $100 financed. Step 2: Compute the total charge by multiplying the amount financed with the table factor, then dividing the amount by 100. Finance charge=Amount financed×Table factor100 Step 3: Compute the monthly payment by adding the amount financed with the finance charge and then dividing it by number of months of the loan, Monthly payment=Amount financed+Finance chargeNumber of months of the loan Calculation: Consider that annual percentage rate (APR) is 13.5%, installment loan for 48 months and amount financed is$5,000.

The table factor at the intersection of 13.5% APR column and 48 payments row is \$29

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