a

Finding Finance Charge and APR

okay financing a used car jack wishes to

purchase a used car that has a cash

price of $12,000 installment terms

include a down payment of three thousand

dollars and forty eight monthly payments

of two twenty four so what finance

charge will Jack pay well it was twelve

thousand dollars and he paid three

thousand down so he's borrowing nine

thousand dollars it again forty eight

payments times two hundred twenty four

dollars that would mean his total

payments are gonna be one thousand ten

thousand seven fifty to subtract out the

nine thousand that he borrowed and it's

one thousand seven hundred fifty-two

dollars

it's his finance charge this is total of

payments here

this is the amount borrowed

okay so the answer for a is 1752 dollars

now for B what is the APR to the nearest

half percent this is going the back to

the table we couldn't really do this

part in the formula we could try it's

gonna be a little complicated so we're

gonna do this in neat with the table so

the number of hundreds is what number of

hundreds borrowed is nine thousand

divided by 100 is ninety hundredths

which I've got 1750 to the finance

charge and divide that by ninety the

number of hundreds

what do we get from this

nineteen point four seven so that means

he's paying nineteen point four seven

per hundred and this is on a forty eight

month loan

it's our finance charge

per $100 borrowed so now we go to the

table I don't we're gonna be able to see

the table very well with all this other

stuff on the board but let's just take a

look okay mm-hmm if we're down a little

more okay probably if you raise some

stuff here I'm gonna put this back up

like it was if you want to pause it now

I'm going to count the 5 1 2 3 4 5 so it

should be paused if you I'm going to

scroll

I think the erases some things

so we're looking for 1947 on the 48

month parks 48-month 1947 is that's the

closest nineteen forty five nineteen

point four five and that corresponds to

nineteen point 0 percent

so we looked at 48 months what was our

finance charge for $100 and found it on

the chart