Example 1 Blake and Jacqueline Toepfer are purchasing a $1,399.99 side-by-side refrigerator with an installment loan that has an APR of 12%. The store financing requires a 10% down payment and 12 monthly payments. What is the finance charge? Step 1: Find the amount financed. Amount Financed = Selling Price - Down Payment Amount Financed = $1,399.99 - (0.10 . $1,399.99) Amount Financed = $1,399.99 $140.00 Amount Financed = $1, 259.99 Step 2: Find the monthly payment. (Refer to the Monthly Payment on a Simple Installment Loan of $100 table on the previous page.) Monthly Payment - Amount of Loan $100 " . Monthly Payment for a $100 Loan Monthly Payment $1,259.99 $100 $8.88 Monthly Payment = $111.887 Monthly Payment = $111.89 Step 3: Find the total amount repaid. Total Amount Repaid = Number of Payments . Monthly Payment Total Amount Repaid = 12 $111.89 Total Amount Repaid = $1, 342. 68 Step 4: Find the finance charge. Finance Charge = Total Amount Repaid - Amount Financed Finance Charge = $1,342.68 $1,259.99 Finance Charge = $82. 69 The finance charge is $82. 69. Concept Check Complete the problem. 1. Ingrid Nilsen purchased a $4,000 hydroponic system for her garden. The down payment is 20%, and the installment loan has an APR of 10% for 36 months. Find the a) down payment, b) amount financed, c) monthly payment, d) total amount repaid, and e) finance charge