Tim Worker buys a satellite dish for $329.99. He pays 10% down and takes an installment loan to complete the purchase. He makes 12 payments which include his principal and a $40.00 finance charge. What is the APR on his loan?
Tim will pay ($329.99 x 10%) or $ (to the nearest whole number) for his down payment.
He will finance ($329.99 - down payment) or $.
Tim will repay finance amount ÷ 12 plus $40.00 ÷ 12 or monthly payment of $.
At the end of one year Tim will have paid monthly payments totaling $.
The APR = finance charge for one year ÷ amount financed = % (to the nearest tenth).
