Use an annual percentage rate table to solve the problem.
-A homeowner installed new kitchen cabinets and countertops for $5500. He paid 10% down and Financed the balance with a 24-month fixed installment loan with an APR of 7.0%. Determine the Total finance charge and monthly payment for the loan.
A) Total finance charge = $614.79; Monthly payment = $231.87
B) Total finance charge = $368.78; Monthly payment = $443.23
C) Total finance charge = $368.78; Monthly payment = $221.62
D) Total finance charge = $652.30; Monthly payment = $256.35

Question

Quizplus · Accepted Answer

The down payment is 10% of $5500, which is $550. The financed amount is $4950. Using the APR table for 7.0% over 24 months, the monthly payment is approximately $221.62, and the total finance charge is $368.78.

Use an Annual Percentage Rate Table to Solve the Problem