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? a. $498 b. $365 c. $422 d. $787.

Answer 1

The amount Kevin paid for the finance charges is $787.  

A loan is a business deal in which one or more people, businesses, or other organizations lend money to other people, businesses, or institutions.  

Computation of the amount for the finance charge is:      

$\begin{aligned}\text{Yearly payment of the interest}&= \text{Weekly Amount} \times \text{Total Number of Weeks}\\ \text{Yearly payment of the interest}&=\ 36. 13 \times 52\\\text{Yearly payment of the interest}&=\ 1878.76\end{aligned}$

$\begin{aligned}\text{Payment of the interest in four years}&=\text{Yearly payment of the interest} \times 4\\\text{Payment of the interest in four years}&=\ 1878.76 \times 4\\\text{Payment of the interest in four years}&= \ 7515.04\end{aligned}$

$\begin{aligned}\text{Amount of the finance charge}&=\text{Interest in four years}+ \text{Service Charge}-\text{Principal Amount}\\\text{Amount of finance charge}&=\ 7515.04+\ 422-\ 7,150\\\text{Amount of finance charge}&= \ 787.04\end{aligned}$

Therefore, the correct option is D.

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

https://brainly.com/question/24603702