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fiasKO [112]
3 years ago
8

Jaime needs a new roof on her house. The cash cost is $7500. She decides to finance the project by paying 20% down , with the ba

lance paid in 36 monthly payments of $189.40. (a) What finance charge will Jaime pay? (b) What is the APR to the nearest half percent ?
Mathematics
1 answer:
Gnesinka [82]3 years ago
8 0

Answer:

(a) What finance charge will Jaime pay?

$818.4

(b) What is the APR to the nearest half percent ?

8.5%

Step-by-step explanation:

(a) What finance charge will Jaime pay?

The cash cost is $7500. She decides to finance the project by paying 20% down

Amount paid for down payment = $7500 × 20/100

= $1500

Amount left = $7500 - $1500

= $6000

The balance paid in 36 monthly payments of $189.40.

Hence: $189.40 × 36 = $6818.4

The finance charge = $6818.4 - $6000

= $818.4

(b) What is the APR to the nearest half percent ?

Step 1

Finance charge/ Amount left × 100

= 818.4/6000 × 100

= 13.64

Using the APR table:

The APR to the nearest half percent = 8.5%

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