Question

You are borrowing $1,575 to purchase a washer and dryer using a 36 month installment plan. Determine the annual percentage rate (APR) and the monthly payment given that the interest charge is $99.32. Round your answer to the nearest whole percent and to the nearest cent.
a. 5%; $47.20
c. 4%; $49.42
b. 5%; $50.18
d. 4%; $46.50

Answer 1

I think its A) hope i helped

Answer 2

Answer:

Option d - 4%; $46.50                      

Step-by-step explanation:

Given : You are borrowing $1,575 to purchase a washer and dryer using a 36 month installment plan. The interest charge is $99.32.    

To find : The annual percentage rate (APR) and the monthly payment ?

Solution :

The amount borrowed = $1,575

The interest charge = $99.32

Total amount paid in 36 month is 1575+99.32=$1674.32

For monthly payment,

The amount paid in a month = $\frac{1674.32}{36}=\ 46.05$

Monthly payment, M=$46.05

Now, we have to find the APR=x  (let)

Applying monthly payment formula,

$M=\frac{A}{\frac{1-(1+i)^{-n}}{i}}$  

$M=\frac{A\times \frac{x}{12}}{1-(1+\frac{x}{12})^{-n}}$  

Substituting the value,

M=$46.50 , A=$1575 , n=36

$46.50=\frac{1575\times \frac{x}{12}}{1-(1+\frac{x}{12})^{-36}}$  

We solve the equation using graph,

First we plot the graph of $\frac{1575\times \frac{x}{12}}{1-(1+\frac{x}{12})^{-36}}$  represent by line in black.

Then, put y=46.50 represent by red line.

Refer the attached figure below.

The intersection of the lines is the solution of x

i.e, x=0.04

In the percentage $x=0.04\times 100=4\%$

The APR is 4%.

Therefore, Option d is correct.