Answer:
Option A - c=$26.13
Step-by-step explanation:
Given : Amount Financed (m) = $275, Number of payment per year(y) = 12, Number of payments(n) = 18 and APR(I)=12%
To find : The value of c.
Solution :
The formula used to find c is the interest formula,
[tex]I=\frac{2yc}{m(n+1)}[/tex]
Where I=interest=12% , m=amount financed=$275 , n=number of payment=18, y=number of payments per year=12 , c=total interest=?
Substitute all the values given,
[tex]12\%=\frac{2(12)(c)}{(275)(18+1)}[/tex]
[tex]\frac{12}{100}=\frac{24(c)}{(275)(19)}[/tex]
[tex]\frac{12}{100}=\frac{24(c)}{5225}[/tex]
[tex]c=\frac{12\times5225}{24\times100}[/tex]
[tex]c=\frac{62700}{2400}[/tex]
[tex]c=26.125[/tex]
Approximately c= $26.13
Therefore, Option A is correct.
