A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $1,400 per month for the next three years and then $2,800 per month for two years after that. If the bank is charging customers 8.50 percent APR, how much would it be willing to lend the business owner?
You are looking to buy a car. You can afford $470 in monthly payments for four years. In addition to the loan, you can make a $1,200 down payment. If interest rates are 7.50 percent APR, what price of car can you afford?
What annual interest rate would you need to earn if you wanted a $1,000 per month contribution to grow to $83,500 in six years?
You wish to buy a $9,000 dining room set. The furniture store offers you a 3-year loan with an 10 percent APR. What are the monthly payments? How would the payment differ if you paid interest only?