consumer math

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Tim Worker buys a new sofa for $629.95. He pays 25% down and takes an installment loan to complete the purchase. He makes 12 payments which include his principal and a $60.00 finance charge. What is the APR on his loan to the nearest tenth?

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

  • consumer math -

    I = Po*r*t = $60.
    472.46*r*1 = 60
    r = 0.127 = 12.7% = APR

    0.25 * 629.95 = $157.49 = Down payment.

    629.95 - 157.49 = $472.46=Amt. financed.

    (472.46+60)/12 = 532.46/12 = $44.37/mo.

    472.46 + 60 = $532.46 = Total paid.

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