Question

A fishing boat is purchased for $6,200 and financed for 36 months. If the total finance charge is $1,135, find the annual percentage rate using the table. Click the icon to view the table of interest per $100 of amount financed. The annual percentage rate is %. (Type an integer or a decimal.)​

Answer 1

The annual percentage rate for the fishing boat purchase of $6,200 and financed for 36 months with a total finance charge of $1,135 is approximately 6.1%.

The annual percentage rate is the interest rate paid each year on an outstanding loan amount.

The mortgage amount for the fishing boat = $6,200

Financing period = 36 months = 3 years

Total finance charge = $1,135

Annual Percentage Rate = Total Finance Charge/Mortgage/3 ($1,135/$6,200 ÷ 3 ≈ 6.1%

The total APR for 36 months = 18.3% (6.1% x 3)

Thus, the annual percentage rate (APR) is 6.1%.