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A fisherman makes purchases for a lobster trapping business. Find the cost of credit for the loan. (See Example 3.)
The fisherman purchases lobster buoys and paint online for $500. The website offers an installment loan that allows him to pay by making 3 equal monthly payments of $172.25.
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The total amount paid by the fisherman is
Because the principal of the loan was $500, the cost of credit is $16.75.
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A fisherman makes purchases for a lobster trapping business. Find the cost of credit for the loan. (See Example 3.)
The fisherman purchases lobster traps online for $1440. The website offers an installment loan that allows him to pay by making 12 equal monthly payments of $127.94.
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A fisherman makes purchases for a lobster trapping business. Find the cost of credit for the loan. (See Example 3.)
The fisherman purchases a lobster boat for $250,000 plus 5% sales tax. The seller offers an installment loan that allows him to pay by making 60 equal monthly payments of $4988.75.
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The total principal for the loan is
The total amount paid by the fisherman is
So, the cost of credit is
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Can you find the cost of credit for the loan in Exercise 1? Exercise 2 ? Explain. (See Example 3 .)
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A fisherman pays a contractor to repair his dock. The charges are $1200 for lumber, $60 for sales tax, and $750 for labor. The fisherman pays $260 down and finances the remainder. There is a finance charge of $41.06. Complete the Truth in Lending disclosure for the loan. (See Example 4.)
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The completed disclosure is shown below.
Note that the total amount due agrees with the 6 payments.
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A fisherman borrows $4500 to put a new roof on his shop. The other charges are $160. The annual percentage rate is 6%. Complete the Truth in Lending disclosure for the loan. (See Example 4.)
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When posting a comment, you agree to our Terms of Use.Showing 2 commentsGuest 3 years ago |kebun0 0John Bennett 5 years ago |I get a different amount for the Finance charges if I use the simple interest formula than I do if I multiply the payment by the months and subtract the Amount Financed. Should these be same?0 0