Jamie needs a new roof on her house. The cash cost is $5600. She decides to finance the project by paying 6.0% down, with the balance paid in 12 monthlypayments of $463.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.a) The finance charge is $b) The APR is%. Number ofpayments6121824303648604.0% 4.5% 5.0%Annual Percentage Rate Table for Monthly Payment PlansAnnual Percentage Rate5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5%2.79 2.931.17 1.32 1.462.18 2.45 2.733.20 3.60 4.005.225.506.86 7.28 7.698.10(Finance charge per $100 of amount financed)1.61 1.76 1.90 2.05 2.20 2.35 2.49 2.643.00 3.28 3.56 3.83 4.11 4.39 4.66 4.944.41 4.82 5.22 5.636.04 6.455.83 6.37 6.91 7.458.00 8.54 9.09 9.64 10.19 10.758.61 9.30 9.98 10.66 11.35 12.04 12.74 13.439.52 10.34 11.16 11.98 12.81 13.64 14.48 15.32 16.1617.18 18.31 19.45 20.59 21.744.22 4.75 5.295.25 5.92 6.59 7.26 7.946.29 7.09 7.90 8.718.38 9.46 10.54 11.63 12.73 13.83 14.94 16.0610.50 11.86 13.23 14.61 16.00 17.40 18.81 20.23 21.66 23.10 24.55 26.01 27.48Print9.0% 9.5% 10.0%Done

If an individual takes a loan from the bank, It is the individual's responsibility to pay the interest at a predetermined rate, as per the loan agreement.The calculation of the finance charge is as follows- Finance charge = Amount paid - Amount financed= $5,556-$5,264= $292 Thus the finance charge is $292 Explanation- Given Cash cost = $5,600 Finance the project = 6% down The balance payment is 12 monthly payments of $463 The calculation of the balance of the loan amount after the down payment is as follows- Balance amount of loan after down payment = Cash cost - (Cash cost × down payment %) =$5,600- ($5600 ×6%) =$5,600-$336 =$5,264 The total amount paid in 12 installments = Monthly pay ×no of installment =$463×12 = $5,556 b) The calculation of finance charge percent is as follows- Finance charge percent = Finance chargeAmount financed×100 =$292$5,264×100= 5.55% In the APR table no. of payment 12(on the left-hand side) move across to the right until the 5.50 value find. At the top of this column, the APR rate is 10% APR= 10%Final answer- The finance charge is $292 APR= 10%

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Jamie needs a new roof on her house. The cash cost is $5600. She decides to finance the project by paying 6.0% down, with the balance paid in 12 monthly payments of $463. 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. a) The finance charge is $ b) The APR is %.

Jamie needs a new roof on her house. The cash cost is $5600. She decides to finance the project by paying 6.0% down, with the balance paid in 12 monthly payments of $463. 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. a) The finance charge is $ b) The APR is %.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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