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%
