Chapter 13.II, Problem 32RE

### 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 32. $3,875 30 16.5% __________ _________ _____________ To determine To calculate: The table factor, finance charge and monthly payment if annual percentage rate (APR) is 16.5%, installment loan is for 30 months and amount financed is$3,875.

Explanation

Given Information:

The annual percentage rate (APR) is 16.5%, installment loan is for 30 months and amount financed is $3,875. 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-payments 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 16.5%, installment loan is for 30 months and amount financed is $3,875. The table factor at the intersection of 16.5% APR column and 30 payments row is$22

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