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How was the finance charge calculated in Example 4? First, the monthly payment, $65.08, was calculated (see Section 6.2). The monthly payment M for an installment loan with a principal of P taken out for n months at an annual percentage rate of r (in decimal form) is
Using P = $1438.95, r = 8% = 0.08, and n = 24, the monthly payment is
Next, the monthly payment and the number of payments were used to find the total amount due.
Then the amount financed was subtracted from the total amount due to determine the finance charge.
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When posting a comment, you agree to our Terms of Use.Showing 1 commentsRon Larson (author)1 decade ago |When buying appliances, some people focus only on the cost and the type of credit available. Try to also focus on quality. For a comparison of the reliability of different brands, you can check Consumer Reports at ConsumerReports.org.0 1