Answered

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What is the total finance charge for a $4,250 loan at 13.25% interest compounded monthly for 24 months? a. $25.47 b. $202.55 c. $611.20 d. $4,861.20 please select the best answer from the choices provided a b c d

Sagot :

tushargupta0691

The total finance charge is $611.20 (Option c) for this compound interest.

Data Given

Principal, P = $4250

Rate of Compound Interest, R = 13.25%

Time, t = 24 months, i.e., 2 years

Since it is compounded monthly, n = 12

Calculating the Total Finance Charge

We know that the formula for total amount of finance charge in a Compound Interest is,

[tex]A=P\frac{r(1+r)^{n} }{(1+r)^{n} - 1}[/tex]

Substituting the values of P, R and n, we get,

[tex]A=4250\frac{13.25(1+13.25)^{24} }{(1+13.25)^{24} - 1}[/tex]

[tex]A = 611.20[/tex]

Thus, the total finance charge is $611.20

Learn more on Compound Interest here:

https://brainly.com/question/14295570

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