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6.1 Introduction to Lending

6.1 Introduction to Lending
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  • Math Help

    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.

  • Consumer Suggestion

    To compare credit terms on various credit cards and find the right credit card for you, visit CompareCards.com.

  • Checkpoint Solution

    The completed disclosure is shown below.

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    system user
    Ron 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.
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