Answer:
a). The monthly payments= $158.41
b). Total amount repaid= $3,801.92
c). The finance charge= $601.92
Step-by-step explanation:
Step 1
The formula for calculating the total amount she will pay is as follows;
A=P(1+r)^n
where;
A=total amount repaid
P=principal loan
r=annual interest rates
n=number of years
In our case;
P=$3,200
r=9%=9/100=0.09
n=24/12=2 years
replacing;
A=3,200(1+0.09)^2
A=3,200(1.09)^2
A=3,801.92
a). monthly payments=Amount to be repaid/total number of months
where;
Amount to be repaid=3,801.92
total number of months=24
replacing;
monthly payments=3,801.92/24=158.41
The monthly payments= $158.41
b). Total amount repaid= $3,801.92
c). The finance charge=Interest
The formula for calculating interest is;
I={P(1+r)^n}-P
where;
P(1+r)^n= $3,801.92
P= $3,200
replacing;
I=(3,801.92-3,200)=601.92
The finance charge= $601.92
