A finance company offers a 36-month installment loan with an APR of 10.5%. Jerry wishes to use the loan to finance an engagement ring for $21,500. After first using Table 13-1 from your text to find the finance charge, calculate the monthly payment.

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The monthly payment can be calculated using the formula for the monthly payment on an installment loan, which incorporates the principal amount, the annual interest rate, and the number of payments. Given the APR of 10.5% and a loan term of 36 months for a principal of $21,500, the correct monthly payment, after calculating the finance charge and applying the formula, is $698.81.

A Finance Company Offers a 36-Month Installment Loan with an APR