Select the correct answer.

Bob has taken out a loan of [tex]$\$ 15,000$[/tex] for a term of 48 months (4 years) at an interest rate of [tex]$6.5\%$[/tex]. Using the amortization table provided, what will be his total finance charge over the course of his loan?

\begin{tabular}{|l|l|l|l|l|l|}
\hline \multicolumn{5}{|c|}{ Monthly Payment per [tex]$\[tex]$ 1,000$[/tex][/tex] of Principal } \\
\hline Rate & 1 Year & 2 Years & 3 Years & 4 Years & 5 Years \\
\hline [tex]$6.5\%$[/tex] & [tex]$\$ 86.30$[/tex] & [tex]$\[tex]$ 44.55$[/tex][/tex] & [tex]$\$ 30.65$[/tex] & [tex]$\[tex]$ 23.71$[/tex][/tex] & [tex]$\$ 19.57[tex]$[/tex] \\
\hline $[/tex]7.0\%$ & [tex]$\[tex]$ 86.53$[/tex][/tex] & [tex]$\$ 44.77$[/tex] & [tex]$\[tex]$ 30.88$[/tex][/tex] & [tex]$\$ 23.95$[/tex] & [tex]$\[tex]$ 19.80$[/tex][/tex] \\
\hline [tex]$7.5\%$[/tex] & [tex]$\$ 86.76$[/tex] & [tex]$\[tex]$ 45.00$[/tex][/tex] & [tex]$\$ 31.11$[/tex] & [tex]$\[tex]$ 24.18$[/tex][/tex] & [tex]$\$ 20.04[tex]$[/tex] \\
\hline $[/tex]8.0\%$ & [tex]$\[tex]$ 86.99$[/tex][/tex] & [tex]$\$ 45.23$[/tex] & [tex]$\[tex]$ 31.34$[/tex][/tex] & [tex]$\$ 24.41$[/tex] & [tex]$\[tex]$ 20.28$[/tex][/tex] \\
\hline [tex]$8.5\%$[/tex] & [tex]$\$ 87.22$[/tex] & [tex]$\[tex]$ 45.46$[/tex][/tex] & [tex]$\$ 24.65$[/tex] & [tex]$\[tex]$ 24.65$[/tex][/tex] & [tex]$\$ 20.52[tex]$[/tex] \\
\hline $[/tex]9.0\%$ & [tex]$\[tex]$ 87.45$[/tex][/tex] & [tex]$\$ 45.68$[/tex] & [tex]$\[tex]$ 31.80$[/tex][/tex] & [tex]$\$ 24.89$[/tex] & [tex]$\[tex]$ 20.76$[/tex][/tex] \\
\hline
\end{tabular}

A. [tex]$\$ 35565$[/tex]
B. [tex]$\[tex]$ 597500$[/tex][/tex]
C. [tex]$\$ 1,682.40$[/tex]
D. [tex]$\[tex]$ 2,071.20$[/tex][/tex]
E. [tex]$\$ 1707420$[/tex]



Answer :

To solve for the total finance charge over the course of Bob's loan, we need to follow these steps:

1. Identify the monthly payment:
- We know the loan amount is [tex]$15,000. - The term is 4 years (48 months). - The interest rate is 6.5%. - From the provided amortization table, the monthly payment per $[/tex]1,000 for a 4-year term at 6.5% is [tex]$23.71. We use this information to find the monthly payment amount: \[ \text{Monthly Payment} = 23.71 \, (\text{per } \$[/tex]1,000) \times \frac{15,000}{1,000} = 23.71 \times 15 = 355.65
\]

2. Calculate the total payment over the 4-year term:
- We multiply the monthly payment by the number of months in the term (48 months):
[tex]\[ \text{Total Payment} = 355.65 \times 48 = 17,071.20 \][/tex]

3. Determine the total finance charge:
- The total finance charge is the difference between the total payment and the original loan amount:
[tex]\[ \text{Total Finance Charge} = 17,071.20 - 15,000 = 2,071.20 \][/tex]

Given these calculations, the correct answer to the total finance charge over the course of Bob's loan is:
[tex]\[ \boxed{2,071.20} \][/tex]

Therefore, option:
[tex]\[ \text{D. } \$ 2,071.20 \][/tex]
is the correct answer.