Determine the finance charge on a $6,500 loan with an interest rate of 9.5% compounded monthly over 36 months.

For a loan repaid in monthly installments, use the monthly rate, 0.095 ÷ 12, and 36 payments to find a monthly payment of about $208.21. The total paid is $208.21 × 36 = $7,495.56; subtracting the $6,500 borrowed gives a finance charge of $995.56, choice C.

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