Patricia Fox plans to borrow $5,000 and to repay it in 36 monthly installments. This loan is being made at an annual add-on interest rate of 7.5 percent.
a. Calculate the finance charge on this loan, assuming that the only component of the finance charge is interest.
b. Use your finding in part (a) to calculate the monthly payment on the loan.
c. Using a financial calculator, determine the APR on this loan.