Question

Aretha applies for a $3600.00 loan at APR of 12% in order to purchase a used car for transportation in college. If she makes monthly payments of $118.50 for three years, what will be the total amount required?
How much is she paying in finance charges?

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Answer 1

The total amount Aretha is required to pay:
Solution: Monthly payment x Number of Payments - Amount Borrowed = Total Amount of Finance Charges
-- $118.50 x 36 - $3600.00 = $666.00

Answer 2

Answer:

Total amount paid =$4266

The total amount she paid in finance charges =$666

Step-by-step explanation:

The annual percentage rate (APR) of a loan is the interest required to be paid each year expressed as a percentage of the total loan balance.  For instance, a loan with APR of 10% requires $200 to be paid annually per $2,000 borrowed.

total amount paid = $118.50 * 3 *12 =$4266

The total amount she paid in finance charges = total amount paid - Amount Borrowed $4266 -  $3600 = $666