Answer:
(a) $1351.68
(b) 11.77%
Explanation:
You want the finance charge and the APR on a loan for the balance of an $8350 sailboat after a $1300 down payment, when the 36 monthly payments were $233.38.
(a) Finance charge
The total amount paid for the sailboat is the sum of the down payment and the monthly payments:
total paid = $1300 +36·$233.38 = $9701.68
The finance charge is the excess amount over the price of the sailboat:
finance charge = $9701.68 -8350.00 = $1351.68
The finance charge on the loan is $1351.68.
(b) Interest rate
We don't have your Table 13-1, but we can find the interest rate using a financial calculator.
The APR on the 36-month loan for $7050 with payments of $233.38 is about 11.77%.