Use an Annual Percentage Rate Table to Solve the Problem

question 52

Multiple Choice

Use an annual percentage rate table to solve the problem.
-A restaurant owner purchased a new dishwasher for $4000. She paid 15% down and financed the Balance with a 12-month fixed installment loan with an APR of 8.5%. Determine the total finance Charge and monthly payment for the loan.

• A) Total finance charge = $261.46; Monthly payment = $305.12
• B) Total finance charge = $167.96 ; Monthly payment = $297.33
• C) Total finance charge = $158.44; Monthly payment = $296.54
• D) Total finance charge = $208.80; Monthly payment = $350.73

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Definitions:

Compute

To calculate or determine by mathematical means.

Compounded Semiannually

Refers to the process of calculating interest on both the initial principal and the accumulated interest over two periods within a year.

Withdraw Every Six Months

A financial term that refers to the process of taking money out of an account or investment at semiannual intervals.

Investment Account

An account that holds financial assets such as stocks, bonds, mutual funds, or other investments managed by a financial institution or individual.