# Math

posted by on .

Mary has decided to purchase furniture. She has 2 choices she can pay the full amount of \$4,200.The other choice is to finance the furniture for two years with an installment loan. The loan requires a 12% down payment and 24 equal monthly payments of \$195 .What would be Mary's finance charge of her loan ?

that doesn't seem right how do you figure it out thanks again :)

• Math - ,

How much money is her 12% down payment?

How much is she paying with 24 equal monthly payments of \$195?

If you can't answer those, tell me what you are thinking at least so that I can help.

• Math for Michael - ,

ok I got \$504 as her down payment I keep messing I am really bad at Math
How do I figure out the last part 24 equal payments of \$195 ?

• Math - ,

Good job on calculating the down payment.

When we have the word "of," that means the same as "multiplied by."

All we have to do is (24)(195) = 4680

Add that to our down payment.

504 + 4680 = \$5184

• Math Michael - ,

ok really dumb question According to the information what would be her finance charge on the loan is it \$504

Because the only choice I have to pick from is \$504 \$984 \$ 3,696

• Math Michael - ,

No, it's not a dumb question at all. I wasn't familiar with the term "finance charge," so I assumed it was the total cost of the furniture. Anyway, "a finance charge is any fee representing the cost of credit, or the cost of borrowing."

We are paying \$5184 with the loan. Without the loan, it's only \$4,200. Our cost of borrowing is the difference.

5184 - 4200 = \$984

I learned something, too... finance charge. I'll have to remember that.