Tim Worker buys a new sofa for $549.95. He pays 20% down and takes an installment loan to complete the purchase. He makes 12 payments which include his principal and a $50.00 finance charge. What is the APR on his loan?

The down payment is $

The amount financed is $

The monthly payment will be $

At the end of one year the monthly payments will total $

The finance charge for one year ÷ amount financed is %

Which of these questions don't you understand?

It's all one whole question!

Can you just tell me the steps to solve each one you do not have to tell me the answer! I just need to know how to get the answer so I will know how to do this problem again ..

What is the APR on his loan?

Divide the price by his total payments. Multiply that by 100.

The down payment is $
Multiply the price by 0.2

The amount financed is $
Subtract the down payment from the price.

The monthly payment will be $
Add $50 to the amount financed. Divide by 12

At the end of one year the monthly payments will total $
Multiply the total payments by 12.

Is the price 549.95?

Yes.

what is the sum of the total payments

To calculate the down payment, we need to find 20% of the purchase price.

Step 1: Multiply the purchase price by 20% (or 0.20)
549.95 x 0.20 = $109.99

Therefore, Tim Worker's down payment is $109.99.

To determine the amount financed, we subtract the down payment from the purchase price.

Step 2: Subtract the down payment from the purchase price.
549.95 - 109.99 = $439.96

So, the amount financed is $439.96.

The monthly payment includes both the principal and the finance charge.

Step 3: Divide the total amount paid over 12 months ($50.00 x 12 = $600.00) by the number of months (12) to get the monthly payment.

600.00 / 12 = $50.00

Therefore, the monthly payment is $50.00.

To find the total amount paid at the end of one year, multiply the monthly payment by the number of months.

Step 4: Multiply the monthly payment by the number of months.
50.00 x 12 = $600.00

Hence, the total amount paid at the end of one year is $600.00.

To calculate the APR (Annual Percentage Rate) on the loan, we need to find the finance charge for one year and then divide it by the amount financed.

Step 5: Find the finance charge for one year.
The finance charge for one year is $50.00.

Step 6: Divide the finance charge by the amount financed.
50.00 / 439.96 = 0.1137

To express this as a percentage, multiply by 100.

0.1137 x 100 = 11.37

Therefore, the APR on Tim Worker's loan is 11.37%.