# Chapter 8: Review and Assessment

List two factors you need in order to determine APR.
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Slide 1: Woordweb

In deze les zitten 15 slides, met interactieve quizzen en tekstslides.

Lesduur is: 60 min

## Onderdelen in deze les

List two factors you need in order to determine APR.

#### Slide 1 -Woordweb

Objectives
• Determine the annual percentage rate of a loan using a table
• Calculate the APR using a formula.
• Evaluate the calculation using a formula and a table.

#### Slide 2 -Tekstslide

Example 1
Uma Hartmann obtained a \$900.00 installment loan to pay for brochures to advertise her new business. The finance charge is \$13.14, and she must repay the loan in 6 months. What is the annual percentage rate?

#### Slide 3 -Tekstslide

Step 1: Find the fi nance charge per \$100.
Finance Charge per \$100 = \$100 ×Finance Charge/Amount Financed
= \$100 ×\$13.14/\$900
\$1.46 = \$100 × 0.0146
The finance charge per \$100 is \$1.46.

#### Slide 4 -Tekstslide

Step 2: Find the APR. (Refer to the Annual Percentage Rate for Monthly Payment Plans table on pages A8–A9.)
In the row for 6 payments, find the number closest to \$1.46. It is \$1.46. Read the APR at the top of the column. The APR is 5.00%.

#### Slide 5 -Tekstslide

For Problems 1–4, refer to the Annual Percentage Rate for Monthly Payment Plans table on pages A8–A9.

#### Slide 8 -Tekstslide

Example 1
Liam Elliott obtained a \$1,700 installment loan to pay for an invisible fence for his dog. The finance charge is \$154.25. He agreed to repay the loan in 18 monthly payments. Use the APR formula to determine the annual percentage rate. Round the
answer to the nearest hundredth of a percent.

#### Slide 9 -Tekstslide

Solution
APR = mf(95n+9 )/(12n)(n+1)(4a+f )
APR = (12 × \$154.25)[(95 × 18) + 9]/(12 × 18)(18 + 1)[(4 × \$1,700) + \$154.25]
APR = \$3,181,869/\$28,540,242
APR = 0.111487 = 11.15%

#### Slide 10 -Tekstslide

Tynetta Mafundo obtained an installment loan of \$3,600.00 to buy a sculpture from the local art gallery. The finance charge is \$126.18. She agreed to repay the loan in 18 monthly payments. Use the APR formula to determine the annual percentage rate.
Round the answer to the nearest hundredth of a percent.

#### Slide 11 -Woordweb

APR = (12 × \$126.18)[(95 × 18) + 9]/(12 × 18)(18 + 1)[(4 × \$3,600) + \$126.18]
APR = \$2,602,841.04/\$59,615,442.72
APR = 0.04366051 = 4.37%

#### Slide 12 -Tekstslide

Calculate the APR using a table for the above question.

#### Slide 13 -Woordweb

What is the difference in APR for the calculation by formula and using a table?

#### Slide 14 -Woordweb

Write the main points of the lesson.