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Sagot :
Using the monthly payment formula, it is found that:
- Her monthly payments are of $105.46.
- The total finance charge is of $3,111.04.
What is the monthly payment formula?
It is given by:
[tex]A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}[/tex]
In which:
- P is the initial amount.
- r is the interest rate.
- n is the number of payments.
Considering that she must pay 20% down, the parameters are given by:
P = 0.8 x 2900 = 2320, r/12 = 0.085/12 = 0.007083, n = 24.
Hence the monthly payments are found as follows:
[tex]A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}[/tex]
[tex]A = 2320\frac{0.007083(1.007083)^{24}}{(1.007083)^{24} - 1}[/tex]
A = $105.46.
The total finance charge is composed by the down payment plus the 24 monthly payments, hence:
F = 0.2 x 2900 + 24 x 105.46 = $3,111.04.
More can be learned about the monthly payment formula at https://brainly.com/question/26267630
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