Question
Maxwell is taking out a loan for 9,750 for 2 years at an APR of 9.25% . What would be the finance charge to the nearest whole dollar?
Solution
3.8
(185 Votes)
Alayah
Master ยท Tutor for 5 years
Answer
### $1806
Explanation
## Step 1: Convert APR to decimal### Convert the Annual Percentage Rate (APR) from percentage to decimal form by dividing by 100.
## Step 2: Calculate the finance charge### Calculate the finance charge using the formula:
. In this case,
9750
Rate = 0.0925
Time = 2\ years
Finance\ Charge = \
1805.625
\
is closer to
1806
\
, the finance charge is approximately
1806$.