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.

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  1. What is the finance charge?

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    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.

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

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