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u Corework. Take Test/X\'? Course Organizer. Mr X( D Section 44 CSecure https/ M

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Question

u Corework. Take Test/X'? Course Organizer. Mr X( D Section 44 CSecure https/ MAT 131/2017 20-MAT_ 131-B Coursework.jnz?portlet Cos Homework 4.4 Homework in Module 4 Personal Finance No time limit 3 questions Scored out of: Exit this Homework 75 Points Time limit: Length Time Remaining Not Timecd Save Progress Progress has never been saved 1) Use an annual percentage rate table to solve the problem. (Spts) A homeowner-stalled new kitchen cabinets and countertops for SSS00. He paid 10% down and financed the balance with a 24-month fixed instaliment loan with an APR ofzos. Determine the total finance charge and monthly payment for the loan Total finance charge $614.79, Monthly payment $231.87 Total finance charge- $652 30, Monthly payment $25635 Total finance charge $368.78, Monthly paymest $443.23 Total finance charge-S368 78, Monthly payment : S221 62 2) Use an annual percentage rate table to solve the problem. Spts) In order to make some home mprovements, a home emmer spent S20,000. He paid 15% as a down pan ment and financed the balance of the purchase with a 3-monh fixed istallment loan with an APR of as Determine the home owner's total finance charge and monthly payment Total finance charge $2920 60, Monthly paysent $553 35 Total finance charge $2562 00, Monthly payment 5626.72 Totual ficance chage $1005 40, Monthly paymest $500.18 Total fisance chage $1205 30, Monbty payt $$05 3) Cse an anmual percestage rate table to solve the problem h the web and Windows

Explanation / Answer

1.

cabinet and coutertops cost = $5500

10% down payment = 5500*10% = $550

amount to be financed = 5500 - 550 = $4950

The mathematical formula for calculating EMIs is:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1],

where P stands for the loan amount or principal = 4950

R is the interest rate per month = 7%/12 = 0.00583

N is the number of monthly instalments = 24

EMI = [4950 x 0.00583x (1+0.00583)^24]/[(1+0.00583)^24-1] = $221.62

Monthly payment is $221.62

Finance charge = total paid in EMIs - financed amount = 221.62*24 - 4950 = 368.78

4th option is the correct answer.

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