Tim Worker buys a new sofa for $549.95. He pays 20% down and takes an installment loan to complete the purchase. He makes 12 payments which include his principal and a $50.00 finance charge. What is the APR on his loan to the nearest tenth?

Question

Mathematics

Ivy Norris

2 February, 13:11

Tim Worker buys a new sofa for $549.95. He pays 20% down and takes an installment loan to complete the purchase. He makes 12 payments which include his principal and a $50.00 finance charge. What is the APR on his loan to the nearest tenth?

+5

Answers (1)

Know the Answer?

Brendan Green · Answer 1

Down payment: $549.95 *.20 = $109.99

Amount financed $549.95 - $109.99 = $439.96

Monthly Payment: $439.96 + 50 / 12 = $40.83

Monthly Payment Totals = $489.96

Finance Charge / amount financed x 100 = 11.36% APR