Question

landon wallin is an auto mechanic who wishes to start his own business. he will need $4500 to purchase tools and equipment. landon decides to finance the purchase with a 48 - month fixed installment loan with an apr of 5%.
a) determine landons finance charge.
b) determine landons monthly payment.
click the icon to view the partial apr table.
a) landons finance charge is $\square$.
(round to the nearest cent as needed.)

Explanation:

Step1: Find the finance charge per $100

From the APR table for 48 - month loan and 5% APR, the finance charge per $100 is $10.96.

Step2: Calculate the number of $100 units

The loan amount is $4500. The number of $100 units is $\frac{4500}{100}=45$.

Step3: Calculate the finance charge

The finance charge $C$ is the finance charge per $100$ times the number of $100$ units. So $C = 10.96\times45$.
$$C=10.96\times45 = 493.2$$

Answer:

$493.20$