Find the total installment cost and the finance charge for an installment loan with these conditions.  Amount financed: $3000  Down payment: $500 Cash price: $3500 Number of Payments: 12 Amount of Payment: $275 What is the total installment cost?  What is the finanace charge?

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.