Final answer:
Jack Fitzgerald will pay a finance charge of $1,560 for the used car, which is the difference between the total amount paid through the installment plan and the cash price of the car.
Step-by-step explanation:
Calculating the Finance Charge
To calculate the finance charge that Jack Fitzgerald will pay for the used car, we need to determine the total amount he will pay over the life of the installment plan and subtract the cash price of the car.
The installment plan involves a down payment of $3,000 and 48 monthly payments of $220. The total amount paid over the life of the loan can be calculated by adding the down payment to the total of the monthly payments:
- Down payment: $3,000
- Total of monthly payments: 48 months × $220/month = $10,560
- Total amount paid: $3,000 + $10,560 = $13,560
Now, we subtract the cash price of the car to find the finance charge:
- Cash price of the car: $12,000
- Finance charge: $13,560 - $12,000 = $1,560
Total Finance Charge
Therefore, the finance charge Jack will pay for the car is $1,560.