So, I recently bought a new vehicle and was wondering how my monthly payments were figured out. After digging around a bit, I found this site where a high school teacher has posted the formula as an exercise for her students. Not only that, but I stumbled across this other website where I could find simple solutions to the most of my financial woes.
Well, I thought I would share this gem in case anybody else is interested.
You can go to this site and the Almighty Internet will give you the same answer.
I would love to know, if anyone ever reads this, how the initial finance charge is decided. I thought about it, fruitlessly, until my brain hurt.
Here is the problem:
You have a principal amount of $4049.00. Your finance charge is calculated to be $538.12. Your interest rate is 8.29%. What formula was used to arrive at the value $538.12?