Boyd purchases a snow blower costing $1,752 by taking out a 13.5% add-on installment loan. The loan requires a 35% down payment and equal monthly payments for 2 years. How much is the finance charge on this loan?

Question

Quizplus · Accepted Answer

The correct answer is A.The finance charge is the difference between the total amount of the loan and the amount of the down payment. The total amount of the loan is $1,752, and the down payment is 35% of $1,752, which is $613.20. Therefore, the finance charge is $1,752 - $613.20 = $1,138.80.

Boyd Purchases a Snow Blower Costing $1,752 by Taking Out