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Sam is paying off his eight-year, $15,360 loan in semiannual installments. The loan has an interest rate of 9.58%, compounded semiannually, and a service charge of $1,294.64. Once the loan has been fully paid off, what percentage of the total finance charge will the service charge be? Round all dollar values to the nearest cent.


a.
5.48%
b.
8.43%
c.
18.55%
d.
15.65%

Respuesta :

Hagrid
We are given with
P = $15,360
n = 8 years or 16 semi-annuals
r = 9.58% compounded semiannually
S = 1294.64

The future amount of the loan is
F = P (1 + i)^n
i should be the effective interest rate of r
n should be the number of payments

F = 15360 (1 + 9.58/2) ^16
Solve for F and divide by the service charge to the answer
EmmArnott

Answer is D

Good luck OWO

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