Meghan Pease purchased a small sailboat for $8,350. She made a down payment of $1,700 and financed the balance with monthly payments of $235.38 for 36 months.
(a)
What is the finance charge (in $) on the loan?
$
Incorrect: Your answer is incorrect.
(b)
Use Table 13-1 to find what annual percentage rate was charged on Meghan's loan. (Round your answer to two decimal places.)

Incorrect: Your answer is incorrect.
%

Let's break down each part of the problem step by step.

### Part (a): Finance Charge
To find the **finance charge**, we can first determine how much Meghan financed and then calculate the total amount she will pay over time.

1. **Total Purchase Price of the Boat:**  
   $ 8350 \, \text{USD} $

2. **Down Payment:**  
   $ 1700 \, \text{USD} $

3. **Amount Financed:**  
   The amount Meghan financed is the total price minus the down payment:
   \[
   \text{Amount Financed} = 8350 - 1700 = 6650 \, \text{USD}
   \]

4. **Monthly Payments:**  
   She makes monthly payments of $ 235.38 \, \text{USD} $ for 36 months.

5. **Total Paid Over 36 Months:**  
   \[
   \text{Total Paid} = 235.38 \times 36 = 8473.68 \, \text{USD}
   \]

6. **Finance Charge:**  
   The finance charge is the total paid minus the amount financed:
   \[
   \text{Finance Charge} = 8473.68 - 6650 = 1823.68 \, \text{USD}
   \]

Thus, the finance charge is **\$1,823.68**.

---

### Part (b): Annual Percentage Rate (APR)
To find the **annual percentage rate (APR)**, we will use the loan information, but it requires referencing a table (like Table 13-1) that likely shows APRs for different combinations of loan terms.

The key values we have are:
- Amount financed: \$6,650
- Monthly payment: \$235.38
- Loan term: 36 months
- Finance charge: \$1,823.68

Without the exact table, I can't pinpoint the APR, but I'll guide you through the process of using the table:
1. Locate the row for 36 months (the loan term).
2. Find the column that matches the closest value to the monthly payment of $235.38, given the amount financed ($6,650).
3. Where the row and column intersect is the APR.

Based on these typical loan terms and finance charges, the APR is likely between **8% and 10%**. You can confirm it using the table in the textbook.

Would you like more details or have any questions about this? Here are 5 related questions to consider:

1. How is the finance charge different from the interest rate?
2. What happens to the finance charge if the loan term is reduced?
3. How can I calculate the monthly interest rate from the APR?
4. Why is the finance charge higher when the monthly payments are lower?
5. What other factors affect the total cost of a loan besides the APR?

**Tip**: When determining finance charges, always verify the full payment schedule, including any early payoff penalties or additional fees.

Meghan Pease purchased a small sailboat for $8,350. She made a down payment of $1,700 and financed the balance with monthly payments of $235.38 for 36 months. (a) What is the finance charge (in $) on the loan? (b) Use Table 13-1 to find what annual percentage rate was charged on Meghan's loan.

Learn how to calculate the finance charge and annual percentage rate (APR) on a sailboat loan using a down payment of $1,700, monthly payments of $235.38, and a loan term of 36 months. This detailed solution covers key finance concepts, suitable for Grades 10-12.

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