Final answer:
The finance charge for Charles' new boat, purchased on an installment plan with a down payment of $150 and $95.00 monthly installments for 2 years, is $280.
Step-by-step explanation:
When Charles bought a new boat on an installment plan, the total cost was $2,150. Initially, he made a down payment of $150 and agreed to pay $95.00 per month for 24 months. To calculate the finance charge, we must first determine the total amount paid over the life of the loan and then subtract the original cost of the boat.
Total payments = (Monthly payment × Number of months) + Down payment
Total payments = ($95 × 24) + $150
Total payments = $2,280 + $150
Total payments = $2,430
The finance charge is then calculated by subtracting the cost of the boat from the total payments made.
Finance charge = Total payments - Cost of the boat
Finance charge = $2,430 - $2,150
Finance charge = $280
The finance charge for Charles' boat on the installment plan is $280.