Question

Choose the correct answers for amount financed and the finance charge in dollars for the following problem.

Curtis Hindle purchased a mountain bike for $650.00 with 75% down. He will make 12 payments of $24.38 each. What is the total amount paid (including down payment) and finance charge in dollars?

The total paid (including down payment) is $.
a. 780.06
b. 749.62
c. 751.62

The finance charge in dollars is $.
a. 130.06
b. 110.06
c. 120.06

Answer 1

Answer: a) 780.06

a)130.06

Explanation:

Given: The cost price of mountain bike = $650

The down payment on purchasing mountain bike = 75% of $650

Therefore, Down payment=
`0.075*650=\$487.5`

He will make 12 payments of $24.38 each.

Total monthly payments =
`12*24.28=\$292.56`

The total amount paid = Down payment + Total monthly payments

`=\$487.5+\$292.56=\$780.06`

The finance charge = Total amount paid - Cost price

`=\$780.06-\$650=\$130.06`

Hence, The total paid (including down payment) is $780.06 and the finance charge in dollars is $130.06.

Answer 2

Total amount paid = (0.75 x 650) + (12 x 24.38) = 487.50 + 292.56 = $780.06

The finance charge is (780.06 - 650.00) = $130.06