Question
You wish to finance the purchase of some living room furniture for
. A bank
offers an APR of
on a 36 -month installment loan. After first using Table
to
find the finance charge, calculate your monthly payment.
Select one:
a.
b.
c.
d.
offers an APR of
find the finance charge, calculate your monthly payment.
Select one:
a.
b.
c.
d.
Ask by Johnston Byrd. in the United States
Mar 12,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The monthly payment is approximately $135.01.
b. $135.01
b. $135.01
Solution

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Beyond the Answer
To find the monthly payment for a loan of
at an APR of
over 36 months, we first need to calculate the finance charge using a finance charge table or the formula for monthly payments on an installment loan. Typically, the monthly payment can be calculated using the formula:
Where:
-
is the monthly payment -
is the principal amount ($3,800) -
is the monthly interest rate (APR/12 months) -
is the number of payments (36)
In this case, the monthly interest rate is
(or approximately
in decimal form). Plugging in the values:
Calculating this will give you a monthly payment. Upon checking the calculations, the closest option should be evaluated based on the complete computations.
Therefore, the most accurate monthly payment among the choices presented aligns with
.
Furthermore, understanding how installment loans work can help you budget effectively, ensuring your payments align with your monthly expenses without stretching your financial limits. Having clarity on each payment breakdown aids in adjusting your budget as your financial situation evolves!
Also, if you’re keen on keeping a solid credit score, remember that timely payments on loans like this one can significantly enhance it! Setting up reminders or using an app to track your payments can help you avoid late penalties—because nobody wants to deal with extra charges!