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Landon Wallis is an auto mechanic whowishes to start his own business. He willneed $3900 to purchase tools andequipment. Landon decides to financethe purchase with a 60-month fixedinstallment loan with an APR of 4.5%a. Determine Landons finance charge.b. Determine Landons monthly payment.

Landon Wallis Is An Auto Mechanic Whowishes To Start His Own Business He Willneed 3900 To Purchase Tools Andequipment Landon Decides To Financethe Purchase With class=

Sagot :

QUESTION A

A finance charge is a cost of borrowing money, including interest and other fees. It can be a percentage of the amount borrowed or a flat fee charged by the company.

The table shows the finance charge depending on the parameters. For a 60-month fixed installment loan with an APR of 4.5%, the finance charge per $100 is shown on the table as shown:

Therefore, the charge on $3900 will be:

[tex]\Rightarrow\frac{3900}{100}\times11.86=462.54[/tex]

The finance charge is $462.54

QUESTION B

The total payment is simply the sum of the finance charge and the loan amount.

Therefore, the total amount will be:

[tex]\Rightarrow3900+462.54=4362.54[/tex]

The monthly payment will simply be the total amount shared over the time period (60 months). Therefore, it is calculated to be:

[tex]\Rightarrow\frac{4362.54}{60}=72.71[/tex]

The monthly payment is $72.71

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