7. Calculating finance charges using the discount method and APRon a single payment loan You are taking out a single payment loan that uses the discount method to compute the finance charges, Computing the finance charges is done the same as the way they're computed using the simple interest method. Under the discount method, a borrower receives the principal less the finance charges. For example, if the principal is $12,000 and the finance charges are $1,440, the borrower will receive $ You're borrowing $10,000 for two years with a stated annual interest rate of 6%. Complete the following table. (Note: Round your answers to the nearest dollar) $10,000 S Principal Finance charges Loan disbursement Total payback S S Annual Percentage Rate (APR) You also want to calculate the APR (annual percentage rate) and compare it to the stated interest rate. APR = Ageng Annual Pinang Chary Atera L B Outstanding by the life of the loan, which is two years First, compute the average annual finance charge by dividing the total finance charge of 5 (2.0 years) - 5 (Note: Round your answers to the nearest dollar) Next, as a single payment loan, the average loan balance outstanding is constant at the in this case, Complete the calculation. (Note: Round your answers to the nearest dollar and your percentage point to the nearest two decimal places.) Complete the calculation. (Note: Round your answers to the nearest dollar and your percentage point to the nearest two decimal pl APR Average Annual Finance Charge / Average Loan Balance Outstanding S /S % The APR IS the stated interest rate because the Term of the loan is more than six months Discount method was used to calculate finance charges Formula to compute finance charges is the same for the discount and simple interest methods O Loan is a single-payment loan $ % The APR is the stated inte O Te the same as is more than six m OD lower than was used to calcul O Fd higher than ute finance charges O Loan is a single-payment loan