The salesperson that you buy a computer for $1467.00 on an installment plan. It requires a 20% down payment. The remainder, plus an additional finance charge, is paid back on a monthly basis for the next 2 years. The monthly payment is $52.00. What is the finance charge

finance charge = $74.4

Step-by-step explanation

• First is to calculate how much is the 20% down payment of the original price of computer or simply what is 20% of $1467.00.

-note to get the decimal form of 20% we need to divide it by 100 (20%/100 = 0.2)

Down payment = ($1467.00) x (0.2) = $293.4

• Now  calculate the remaining amount to pay for installment after the down payment has settle.

Remaining amount = original price - down payment

Remaining amount = ($1467.00) - (293.4)

Remaining amount = $1173.6

•the remaining amount to pay for monthly installment for 2 years is $1173.6 but the finance charge is not included here. But we are given by monthly payment of $52  that will last for 2 years, note that finance charge are already included in this monthly payment of $52, let us calculate how much is the total payment made.

Total payment = (uniform monthly payment) x (2 years) x (12 times a year)

Total payment = ($52) x (2) x (12)

Total payment = $1248

• Now that we already calculated the total payment which includes finance charge, and also we calculated the remaining amount in which the finance charge is not included. we can solve for how much is finance charge by subtracting this two.

Finance charge = Total payment - Remaining payment

Finance charge = ($1248) - ( $1173.6)

Finance charge = $74.4