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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10103
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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If the annual % rate is 9.99 amount financed is $33708.00 for

Customer Question

if the annual % rate is 9.99 amount financed is $33708.00 for 71 monthes how much will the finance charge be?
Submitted: 1 year ago.
Category: Finance
Customer: replied 1 year ago.
if the annual % rate is 9.99% and the amount financed is $33708.00 for 71 months how much will the finance charge be
Expert:  Lane replied 1 year ago.
Hi,.Sometimes the term Finance charge actuall refers to an ADDITIONAL charge over and above interest itself..But, if you by finance charge you mean interest itself ....At this rate the payments, over 71 months (if the interesti is compounded monthly, as would be the normal convention) will total to 44781..SO if the amount financed is 33708, then the amount of total interest over the life of the loan is 44781 .81 - 33708 = 11073.81.In United States law, a finance charge is any fee representing the cost of credit, or the cost of borrowing. It is interest accrued on, and feescharged for, some forms of credit. It includes not only interest but othercharges as well, such as financial transaction fees..Without knowing more here.. and assuming that the interest is the only finance charge, the finance charge is 11073.81.
Customer: replied 1 year ago.
Hi hopefully u can explain this a little better with this info.The total price is for car is $41208.
Minus the Trade-in Value of $7500.
Making the Amount Financed $33708.
The payments are $626.86 per month
Beginning on 06/13/2014
And ending on 05/13/2020.
They say the Finance Charge is $11425.92.
With the Total of Payments being $45133.92(which would actually be 72 months)
And then for the Total Sale Price it says:
Total Sale Price
The total cost of your purchase on credit, including your down payment of $7500 is $52633.92(e)
then under that it says (e) means estimate
So If the $7500 was already deducted from the total price $41208
bringing the amount financed to $33708.
How can the Total Sale Price be $52633.92?Hopefully u can answer this for me!
Thank you,
Pamela
Expert:  Lane replied 1 year ago.
The way they're using "total sales price," it includes includes ALL of your costs, trade-in + amount financed + interest cost (finance charge).Said differently, They'e sayng you bought the 52,633 car by (1) Trading in your old car worth 7500 PLUS (2) 33708 of financing, which costs you (3) 11, 425 in finance charge. (interest).And you're right it is 72 months..The numbers work here. IF you define "Total Sales Price: as including the downpayment + amount funanced + interest cost.Two things will tell you if they're hiding something (1) What's the sticker price... is it 53K or 41K(2) Ask them what the APR is (Ammual Percentage Rate) By Law, they are supposed to be telling you (ALL lenders must disclose this) what interest rate is ... APR is what lets you truly compare finance costs apples to apples..IT sounds almost like what they're doing is BACKING into that disclosure by telling you the finance charge as a number rather than a rate..Here, that rate, by the way, is 10.4%.They'e charging you 10.4% APRfinancing 33,708payment(###) ###-####paymentsThat's a 10.4% interest rate.Don't you think it's interesting that that they say total price of the car is 41208, yet the Total Sale Price of the Car is 62,633?This, I think, is their way of satisfying that they've disclosed all costs..Hope this helps.Lane.If this has helped, Your positive rating … (by using the stars or smileys on your screen) … is thanks enough! :0) … That’s how we’re credited for the work here.