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Jamie needs a new roof on her house. The cash cost is $4000. She decides to finance the project by paying 17.0% down, with the balance paid in 24 monthly payments of $151. a) What finance charge will Jamie pay? b) What is the APR to the nearest half percent?

Jamie needs a new roof on her house. The cash cost is $4000. She decides to finance the project by paying 17.0% down, with the balance paid in 24 monthly payments of $151. a) What finance charge will Jamie pay? b) What is the APR to the nearest half percent?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 15P
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Jamie needs a new roof on her house. The cash cost is $4000. She decides to finance the project by paying 17.0% down, with the balance paid in 24 monthly payments of $151. a) What finance charge will Jamie pay? b) What is the APR to the nearest half percent? Click the icon to view the APR table.
Transcribed Image Text:Jamie needs a new roof on her house. The cash cost is $4000. She decides to finance the project by paying 17.0% down, with the balance paid in 24 monthly payments of $151. a) What finance charge will Jamie pay? b) What is the APR to the nearest half percent? Click the icon to view the APR table.
Number of payments 6 12 18 24 30 36 48 60 4.0% 4.5% Annual Percentage Rate Table for Monthly Payment Plans Annual Percentage Rate 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% (Finance charge per $100 of amount financed) 1.17 1.32 1.46 2.18 2.45 2.73 4.94 5.22 3.20 3.60 7.28 7.69 4.22 4.75 5.29 9.64 10.19 10.75 1.61 1.76 1.90 2.05 2.20 2.35 2.49 2.64 2.79 3.00 3.28 3.56 3.83 4.11 4.39 4.66 4.82 5.22 5.63 6.04 6.45 6.86 5.83 6.37 6.91 7.45 8.00 8.54 9.09 7.26 7.94 8.61 9.30 9.98 10.66 11.35 8.71 9.52 10.34 11.16 11.98 12.81 13.64 12.73 13.83 14.94 16.06 17.18 18.31 19.45 20.59 16.00 17.40 18.81 20.23 21.66 23.10 24.55 26.01 27.48 5.25 5.92 6.59 12.04 12.74 13.43 6.29 7.09 7.90 14.48 15.32 16.16 8.38 9.46 10.54 11.63 21.74 10.50 11.86 13.23 14.61 4.00 4.41 2.93 5.50 8.10
Transcribed Image Text:Number of payments 6 12 18 24 30 36 48 60 4.0% 4.5% Annual Percentage Rate Table for Monthly Payment Plans Annual Percentage Rate 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% (Finance charge per $100 of amount financed) 1.17 1.32 1.46 2.18 2.45 2.73 4.94 5.22 3.20 3.60 7.28 7.69 4.22 4.75 5.29 9.64 10.19 10.75 1.61 1.76 1.90 2.05 2.20 2.35 2.49 2.64 2.79 3.00 3.28 3.56 3.83 4.11 4.39 4.66 4.82 5.22 5.63 6.04 6.45 6.86 5.83 6.37 6.91 7.45 8.00 8.54 9.09 7.26 7.94 8.61 9.30 9.98 10.66 11.35 8.71 9.52 10.34 11.16 11.98 12.81 13.64 12.73 13.83 14.94 16.06 17.18 18.31 19.45 20.59 16.00 17.40 18.81 20.23 21.66 23.10 24.55 26.01 27.48 5.25 5.92 6.59 12.04 12.74 13.43 6.29 7.09 7.90 14.48 15.32 16.16 8.38 9.46 10.54 11.63 21.74 10.50 11.86 13.23 14.61 4.00 4.41 2.93 5.50 8.10
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