select the correct answer. myra is planning to purchase a recliner that costs $1,490. the installment plan…

select the correct answer. myra is planning to purchase a recliner that costs $1,490. the installment plan offered at the furniture store requires a 12% down payment and 20 monthly payments of $71 each. what will be the finance charge for the installment plan? a. $298.00 b. $179.80 c. $108.80 d. $70.00

select the correct answer. myra is planning to purchase a recliner that costs $1,490. the installment plan offered at the furniture store requires a 12% down payment and 20 monthly payments of $71 each. what will be the finance charge for the installment plan? a. $298.00 b. $179.80 c. $108.80 d. $70.00

Answer

Explanation:

Step1: Calculate the down - payment amount

The cost of the recliner is $1490. The down - payment is 12% of the cost. So the down - payment amount is $1490\times0.12 = 178.8$.

Step2: Calculate the total amount paid in installments

The monthly payment is $71 and the number of installments is 20. So the total amount paid in installments is $71\times20=1420$.

Step3: Calculate the total amount paid

The total amount paid is the sum of the down - payment and the total amount paid in installments, which is $178.8 + 1420=1598.8$.

Step4: Calculate the finance charge

The finance charge is the total amount paid minus the cost of the recliner. So the finance charge is $1598.8−1490 = 108.8$.

Answer:

C. $108.80