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28 November, 01:30

Solomon is taking out a 5,320 two year loan with an APR of 10.25%. What will the finance charge be for this loan to the nearest dollar?

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  1. 28 November, 01:51
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    We know that APR means Annual Percentage Rate, so in one year we should pay that rate for the loan amount: $5,320 * 10.25 % = $5,320 * 10.25/100 = $545.30 per year Due that Solomon took the loan for 2 years, the finance charge will be: $545.30 * 2 year = $1,090.60 Rounded to the nearest dollar is: $1,091 That means after two year Solomon will have returned the loan plus the charge: $5,320 + $1091 = $6,411
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