Using simple interest, it is found that:
- The <u>finance charge</u> is of $1,752.
The amount of money after <u>t years </u>in <u>simple interest</u> is modeled by:
In which:
- A(0) is the initial amount.
- r is the interest rate, as a decimal.
In this problem, there is a down payment of $3,000 plus 48 monthly payments of $224, hence, the total amount paid is:
Cash price of $12,000, paid $13,752, hence the finance charge is:
To find the APR, we have that:
- 48 months, hence 4 years, that is .
- Cash price of $12,000, thus the principal is .
- Then, we have to solve the equation for r.
To the nearest half percent, the APR is of 3.5%.
A similar problem is given at brainly.com/question/13176347