If the discount method is used to calculate a finance charge of $250.60 on a $2,400 loan,the amount to be repaid is $2,400.

Question

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The discount method calculates the finance charge by subtracting the amount of the finance charge from the principal amount of the loan. In this case, the finance charge is $250.60 and the principal amount of the loan is $2,400. Therefore, the amount to be repaid is $2,400 - $250.60 = $2,149.40.

If the Discount Method Is Used to Calculate a Finance