Question

your local t-spirit store is having a sale on the latest i-razpod cell phone. the store is also offering financing to those who qualify. the new cell phone is on sale for $150.00 with a two year contract. the sales associate informs you that the closed - end installment loan offered by the store is a 24 month installment plan with monthly payments of $8.44. determine the finance charge (interest) of the installment loan. a. $52.00 b. $52.56 c. $54.30 d. $56.10

Explanation:

Step1: Calculate total payment

Total payment = Monthly payment × Number of months
Total payment = \(8.44\times24\)

$$
LATEXBLOCK0
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Step2: Calculate finance charge

Finance charge = Total payment - Loan amount
Loan amount = \(150\)
Finance charge = \(202.56 - 150\)

$$202.56-150 = 52.56$$

Answer:

B. \(\$52.56\)