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?

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?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 7FPE: Calculating interest and APR of installment loan. Assuming that interest is the only finance charge,...

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Concept explainers

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.

Question

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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