Question

Peg Gasperoni bought a $50,000 life insurance policy for $240 per year. Ryan Life Insurance Company sent her the following billing instructions along with a premium plan example:

"Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge or you may pay the premium in installments after a down payment and the balance in monthly installments of $60. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 15%."

If the total policy premium is:	And you put down:	The balance subject to finance charge will be:	The total number of monthly installments ($30 minimum) will be:	The monthly installment before adding the finance charge will be:	The total finance charge for all installments will be:	And the total deferred payment price will be:
$240	$60.00	$180.00	3	$60.00	$4.80	$244.80
$340	$80.00	$260.00	5	$60.00	$8.93	$348.93
$440	$105.00	$335.00	6	$60.00	$14.58	$454.58

Peg feels that the finance charge of $4.80 is in error. Check your answer.

a. What is the actual finance charge for the first three months? (Round your answer to the nearest cent.)

Finance Charge : $

b. Is she correct?

Yes or No???

Answer 1

SEE SCREENSHOT. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE. THANK YOU

Home nert Page Layout Formulas Data Review View dd-Ins s Cut Σ AutoSum ー E " ゴWrap Text copy ▼ в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Paste Conditional Format CeInsert Delete Format Formatting as Table Styles2 Clear Sort &Find & Format Painter Clipboard AK21 AC Font Alignment Number Cells Edting AD AE AF AG AH Al Al AK AL AN AO AP AQ 10 FINANCE CHARGE 12 13 14 15 16 17 18 19 20 21 LOAN NO OF INSTALMENTS RATE PMT 180 15% 61.51 PMT(AG15/12,AG14,-AG13) 184.52 (61.51 X 3) TOTAL PAYMENTS LESS: LOAN FINANCE CHARGE 180 4.52 ACTUAL FINANCE CHARGE FOR 3 MONTHS = 4.52 23 24 25 26 27 28 YES, SHE IS CORRECT LINE OF CREDIT miler CARD BANKER ACCEPTANC FACTOR SI DISC FOCAL 24-01-2019