Carlos pays <u>service charges</u> of $1,721. 31 while paying off the loan amount.
The <u>principle amount</u> is given as $22,375 at 5.49% <u>interest </u>or 0.0549. It needs to be <em>compounded quarterly</em>, which is in <u>4 months for 7 years.</u>
The interest amount would be:
The<u> value of n </u>is computed as:
Therefore, the discount factor is derived as follows:
Here, the monthly payment is calculated by:
Thus, the final payment for 7 years that is compounded quarterly would be:
The service charge here would be:
Hence, the<em> service charge is 1721.27</em> by deducting the <u>final payment from the total payment. </u>
Learn more about interest payment calculations here:
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