Hello Math Central:

The calculation for determining the finance charge per $100.00 (FC/100) is determined by the following:

Finance Charge/Amount financed * $100.00 = the finance charge per $100.00

Since the denominator (amount financed) is not multiplied by $100.00, how does the result equal the finance charge per $100.00? The numerator (finance charge) is the only amount multiplied by $100.00.

Example 1. 3/4 * 6 = 18/4 not 18/24 The 4 is not multiplied by the 6.

Example 2. $49.00/$200.00 * $100.00 If $49.00 is divided by $200.00 the result is $0.245/$1.00. If $0.245/$1.00 * $100.00 = $24.50/$1.00. This answer is not $24.50/$100.00.

How does the above equal the finance charge per $100.00 when the denominator is not multiplied by $100.00?

If the division is not used to indicate the $0.245 per $1.00, the result becomes $49.00/$200.00 * $100.00 = $4,900.00/$200.00.

I thank you for any helpful reply.

..........

Kenneth