Posted by Terry on .
Wallace and Sarah purchased furniture for their new home. They had two payment options. The first option is to pay a cash payment of $4200. The second option is to finance the furniture with a two year installment loan. The loan requires 12% down payment and 24 equal monthly payments of $195. According to this information what would be the finace charge on the loan.
4200 * 0.12 = 504 down payment
4200 - 504 = 3696
195 * 24 = 4680
4680 - 3696 = 984 finance charge