Question

Homer has decided to buy a trampoline. the trampoline costs $2000.00. he borrows the money from the springfield bank at an interest rate of 19%. he pays the entire $2000.00 at the end of the year with simple interest. what are his finance charges?

Answer 1

Finance Charge = Balance x Interest rates

Since Philip has passed the full year since the initial credit, we use the full 19% for the calculation.

So, the finance charge is:

$ 2,000 x 19%

= $ 380