Question

Sam is paying off his eight-year, $15,360 loan in semiannual installments. The loan has an interest rate of 9.58%, compounded semiannually, and a service charge of $1,294.64. Once the loan has been fully paid off, what percentage of the total finance charge will the service charge be? Round all dollar values to the nearest cent.
a. 5.48%
b. 8.43%
c. 18.55%
d. 15.65%

Answer 1

15360 =  P {1-(1.0479)^-16 / 0.0479]

15360 /  {1-(1.0479)^-16 / 0.0479]  = P

P = 1396.1604

Sam's total payment = 1396.1604^16  = 22338.56
interest charge = 6978.56
Total finance charge = 8273.20

1294.64/8273.2 x 100 = 15.6486

I think the answer is D. 15.65 %

hope this helps

Answer 2

Answer:

15.65%

Step-by-step explanation: