Question

You purchased a vehicle for $11,578 with a down payment of $4,100. You had 36 monthly payments of $251.34. Calculate the finance charge.

$1,570.24


$9,048.54


$7,478


$11,578

Answer 1

Finance charge is a fee that represents the cost of borrowing or credit.
In this equation, it shows the total amount paid through credit subtracted by the cost of vehicle.
let x be the finance charge

x = $4,100 + 36 months ($251.34/month) - $11,578
x = $4,100 + $9,048.24 - $11,578
x = ($4,100 + $9,048.24) - $11,578
x = $13,148.24 - $11,578
x = $1,570.24.
The finance charge is $1,570.24