Question

Tamora just made the last of her monthly payments on her loan. She had been making these payments for the past nine years. The loan had a principal of $10,675 and an interest rate of 4. 75%, compounded monthly. In addition, Tamora paid $939. 25 in service charges. What was Tamora’s total finance charge? Round all dollar values to the nearest cent. A. $939. 25 b. $11,614. 25 c. $3,403. 53 d. $2,464. 28.

Answer 1

The total finance charge of the Tamora is rounding off and approx to  $3,403. 53.

The given information:

Principal = 10,675

Interest rate = 4.75% per year compounded monthly.

An additional $939.25 was paid in service charges.

Computation of the Total Amount of Tamora:

$\text{Total Amount}= \frac{P\times \frac{Rate}{time}}{1-[1+(\frac{rate}{time})^{tn}]}\\\\\text{Total Amount} = \frac{10,675 \times \frac{4.75\%}{12}}{[1 - (1+ \frac{4.75\%}{12})^{12\times9}] }\\\\\text{Total Amount} = \frac{10,675 \times 0.00396 }{[1 - (1.00396)^{108}]}\\\\\text{Total Amount} = \frac{42.273}{(1 - 0.655) }\\\\\text{Total Amount} = \frac{42.273}{0.345 }\\\\\text{Total Amount} = 122.53$

The charge is very close to the amount of  $3,403. 53 and therefore, the correct option is c.

To know more about the calculation of the finance charge, refer to the link below:

https://brainly.com/question/5450317