Final answer:
The finance charge Jack will pay is $1,560, calculated by subtracting the cash price of the car from the total amount paid through installments. The APR is not calculated here because it requires financial formulas and additional information that is not provided.
Step-by-step explanation:
To determine the finance charge Jack will pay for the used car, we first calculate the total amount he will pay over the installment plan. The installment terms include a down payment of $3,000 and 48 monthly payments of $220. Next, to find the finance charge, we subtract the cash price of the car from the total amount paid through installments.
- Total amount paid through installments = Down payment + (Monthly payment × Number of payments)
- Total amount paid through installments = $3,000 + ($220 × 48)
- Total amount paid through installments = $3,000 + $10,560
- Total amount paid through installments = $13,560
- Finance charge = Total amount paid through installments - Cash price of the car
- Finance charge = $13,560 - $12,000
- Finance charge = $1,560
The Annual Percentage Rate (APR) can be estimated by finding the interest rate that would equate the present value of the installments payments to the amount financed (cash price minus down payment). Calculating the APR accurately requires additional financial formulas or tools like an APR calculator.