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Determine the finance charge per $100 borrowed for a 4 year loan with monthly payments of $369.25 and a starting principal of $14,000. Round your answer to the nearest cent, if necessary.

User J Freebird
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Final answer:

The finance charge per $100 borrowed for the described loan is $26.60.

Step-by-step explanation:

To calculate the finance charge per $100 borrowed for a 4 year loan with monthly payments of $369.25 and a starting principal of $14,000, we first need to find the total amount paid over the life of the loan. The loan period is 4 years, or 48 months, so the total amount paid is 48 months times the monthly payment amount:

48 x $369.25 = $17,724.00

The finance charge is the total amount paid minus the original loan amount:

$17,724.00 - $14,000 = $3,724.00

Then, to find the finance charge per $100 borrowed, we divide the total finance charge by the original principal and then multiply by 100:

($3,724.00 / $14,000) x 100 = $26.60

Therefore, the finance charge per $100 borrowed is $26.60.

User TarasB
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