Question

Kevin has just finished paying off his loan. He was assessed a service charge of $422. He paid off the principal and the interest by making weekly payments of $36.13 for four years. If the principal was $7,150, how much did Kevin pay in finance charges, to the nearest dollar?

Answer 1

For E2020 the choices are a.  $498 b.  $365  c.  $422  d. $787 and the correct answer is d. $787

Answer 2

Answer:

$787.04

Explanation:

If Kevin paid $36.13 per week for 4 years, then he paid: $36.13 x 52 weeks x 4 years = $7515.04.

So, he was assessed a service charge of $422. Therefore, $7515.04 + $422 = $7937.04; this is the total amount he paid.

To calculate the finance charges we subtract: $7937.04 - $7150 = $787.04.

Therefore, he had $787.04 from finance charges.