Peg Gasperoni bought a $50,000 life insurance policy for $220 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 $55. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 18%." The total number The monthly If the The balance of monthly installment total subject to installments before adding policy And you finance charge ($30 minimum) the finance premium is: put down: will be: will be: charge will be: $220 $55.00 $165.00 3 $55.00 320 75.00 245.00 5 55.00 420 100.00 320.00 6 55.00 The total finance charge And the total for all deferred installments payment price will be: will be: $5.27 $225.27 10.42 330.42 17.38 437.38 Peg feels that the finance charge of $5.27 is in error. a. What is the actual finance charge for the first three months? (Round your answer to the nearest cent.) Finance Charge $ 5.09 X