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Here is an example: You want to purchase something, I don't know lets say a 4-wheeler. The 4-wheeler cost is only $4,500 but you do not have enough cash but you really want it so you go to the bank and they are all too happy to give you the money as long as you pay a finance charge so they can make money too, that is what their main objective is anyway, it is certainly not about helping you.
Okay so the $4,500 is approved at a rate of lets just say 15.49% and lets just say the bank is very generous and gives you 5 years to pay them back, how generous of them indeed. Here is the part you need to understand math for. This amount with this interest for 5 years calls for a monthly payment of $454.00 (((A MONTH!!))). So basically when you add all of this together you get a $4,500 4-wheeler for $27,240.00.
Don't believe it, lets do the math together.
15.49%+total finance charges of $8360.96 which makes the total amount financed $18,879.04 which leaves you with a total of $27,240.00.
If that version is too difficult for you to understand just do it the easy way multiple $454.00 times 12 (12 months in a year) which gives you $5,448.00 for each year so now multiple $5,448.00 times 5 (you financed for 5 years) and you get the grand total of $27,240.00.
That is unbelievable!!!! Look at all that wasted money. I cannot see how anyone in their "Right" mind could do such a thing but it happens every day when people are desperate to get something so beware of banks and their finance changes. My car was $6,000 cheaper than this made up 4-wheeler. It seems criminal to me that a bank could get away with that but make sure not to miss the payments because then you might have to go and do even more crazy things, like???? borrow against your house to pay off the debt for the made up 4-wheeler which is even dumber than buying a $27,240.00 4-wheeler in the first place. Anyway, buyer beware!
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