Peg Gasperoni bought a $50,000 life insurance policy for $190 per year. ?

Peg Gasperoni bought a $50,000 life insurance policy for $190 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 $50. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 18%."

If the total policy premium is:

If the total policy premium is: $190

And you put down: $50.00

The balance subject to finance charge will be: $140.00

The total number of monthly installments ($30 minimum) will be: 3 months

The monthly installment before adding the finance charge will be: $50.00

The total finance charge for all installments will be: $4.35

And the total deferred payment price will be: $194.35

Peg feels that the finance charge of $4.35 is in error.

a. What is the actual finance charge for the first three months? (Round your answer to the nearest cent.)