Peg Gasperoni bought a $50,000 life insurance policy for $100 per year. Ryan Life Insurance Company sent her the following billing instructions along with a premium plan example:

"Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge or you may pay the premium in installments after a down payment and the balance in monthly installments of $30. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 15%."

If the total policy premium is:	And you put down:	The balance subject to finance charge will be:	The total number of monthly installments ($30 minimum) will be:	The monthly installment before adding the finance charge will be:	The total finance charge for all installments will be:	And the total deferred payment price will be:
$100	$30.00	$ 70.00	3	$30.00	$1.75	$101.75
$200	$50.00	$150.00	5	$30.00	$5.67	$205.67
$300	$75.00	$225.00	8	$30.00	$12.84	$312.84

Peg feels that the finance charge of $1.75 is in error. Check your answer.

a. What is the actual finance charge for the first three months? (Round your answer to the nearest cent.)

Finance Charge $

b. Is she correct?

	Yes
No