You wish to finance the purchase of a boat home for $38,600. A finance company offers an APR of 10% on a 24-month installment loan. After using Table 13-1 from your text to find the finance charge, calculate the monthly payment.

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The correct answer is A because the monthly payment is $1,781.23. This can be calculated using the formula for the monthly payment on an installment loan:Monthly payment = (Loan amount * APR) / (1 - (1 + APR)^(-n))where:Loan amount = $38,600APR = 10% = 0.10n = 24 (number of months)Plugging these values into the formula, we get:Monthly payment = (38600 * 0.10) / (1 - (1 + 0.10)^(-24))Monthly payment = 3860 / (1 - (1.10)^(-24))Monthly payment = 3860 / (1 - 0.3855)Monthly payment = 3860 / 0.6145Monthly payment = $1,781.23

You Wish to Finance the Purchase of a Boat Home