math

A bank offers a 24-month installment loan with an APR of 10%. Alicia wishes to use the loan to finance a sailplane for $42,800. After first using Table 13-1 to find the finance charge, calculate the monthly payment.

asked by Ricky
  1. What is the finance charge?

    posted by Ms. Sue
  2. Working this without archaic tables, instead using modern technology .... (a basic scientific calculator)
    i = .10/12 = .0083333...
    n = 24

    42800 = paym(1 - 1.0083333...^-24)/.0083333...
    paym = 1975.00

    using your tables:
    42800/100 = 428
    charge per 100 for 24 months = 10.75
    so total interest charge = 10.75(428) = 4601
    amount repayable = 42800+4601= 47401
    divided into 24 payments ----47401/24 = 1975.04

    compare with proper answer above.

    posted by Reiny
  3. (amount financed + finance charge)/#months of loan, same answer! thank you so much,.

    posted by Ricky

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