Question

Your friend just purchased a new sports car for $32,000. He received $6,000 for his trade in and he used that money as a down payment for the new sports car. He financed the vehicle at 6.76% APR over 48 months with a monthly payment of $619.15. Determine, from the given information, the finance charge.

Answer 1

The solution to the problem is as follows:

let

R = $619.15 periodic payment

i = 0.0676/12 the rate per month

n = 48 periods

S = the future value of an ordinary annuity

S = R[((1 + i)^n - 1)/i]

S = 619.15*[(1 + 0.0676/12)^48 - 1)/(0.0676/12)]

S = $34,015.99

I hope my answer has come to your help. God bless and have a nice day ahead!