Find the finance charge and total installment cost of the loan. Round to the nearest cent.
-Amount financed: $292.00
Down payment: $73.00
Cash price: $365.00
Number of payments: 24
Amount of payment: $20.47

Question

Quizplus · Accepted Answer

To find the finance charge, we first need to calculate the total amount that will be paid over the life of the loan:

Amount of payment x Number of payments = Total amount paid
$20.47 x 24 = $491.28

The finance charge is the difference between the total amount paid and the amount financed:

Total amount paid - Amount financed = Finance charge
$491.28 - $292.00 = $199.28

To find the total installment cost, we add the finance charge to the amount financed:

Amount financed + Finance charge = Total installment cost
$292.00 + $199.28 = $491.28

Therefore, the finance charge is $199.28 and the total installment cost of the loan is $564.28, making option C the correct choice. The finance charge can be found using the formula: 
Finance Charge = Total Installment Cost - Amount Financed

Total Installment Cost can be found by multiplying the number of payments by the amount of payment: 
Total Installment Cost = 24 x $20.47 = $491.28

Amount Financed is the difference between the cash price and the down payment: 
Amount Financed = $365.00 - $73.00 = $292.00

Therefore, Finance Charge = $491.28 - $292.00 = $199.28

The total installment cost is the sum of the amount financed and the finance charge: 
Total Installment Cost = $292.00 + $199.28 = $491.28

Rounding to the nearest cent, we get: 
Finance Charge = $199.28 
Total Installment Cost = $491.28

So, the best choice is C.

Find the Finance Charge and Total Installment Cost of the Loan