You are borrowing $1,575 to purchase a washer and dryer using a 36 month installment plan. Determine the annual percentage rate (APR) and the monthly payment given that the interest charge is $99.32. Round your answer to the nearest whole percent and to the nearest cent.

Question

Mathematics

Cailyn Hebert

20 May, 03:24

You are borrowing $1,575 to purchase a washer and dryer using a 36 month installment plan. Determine the annual percentage rate (APR) and the monthly payment given that the interest charge is $99.32. Round your answer to the nearest whole percent and to the nearest cent.

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Answers (1)

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Julian Pennington · Answer 1

Solve for finance charge:

Finance charge = $1,575 * (99.32/1575) * 3 (for 36 months) = $297.96

Solve for the annual finance charge:

Annual Finance Charge = $297.96/3 years = $99.32

Solve for average loan:

Average loan = $1,575 - $297.96 = $1277.04

Solve for APR:

APR = $99.32/1277.04

APR=0.078 or 7.8 %