Question

Your friend just purchased a new sports car for $32,000. He received $6,000 for his trade in and he used that money as a down payment for the new sports car. He financed the vehicle at 6.76% APR over 48 months with a monthly payment of $619.15. Determine, from the given information, the finance charge.

Answer 1

The finance charge is $29,719.2

Explanation:

Given data:

Total amount of purchased car = $32,000

down payment is $6000

thus total amount left after giving down payment is $26000

Interest rate is 6.76% for a period of 48 months

Monthly payment is $619.15

from the data given above we have installment amount of loan as

`= $619.15* 48\ month = $29,719.2`

The finance charge is $29,719.2

Answer 2

$32000- $6000 = $26000

48($619.15)= $29719.2

$29719.2-$26000= $3719.2 is the finance charge.