Question #1 - Simple Interest
Marisol needed to borrow $2,000 to pay off a high-interest credit card debt. Her local bank offered her a simple interest $2,000 loan with a 9-month term and told her she would pay $157.50 in interest.
Calculate the annual interest rate Marisol is being offered.
If the bank loan is structured as an installment loan, calculate the total installment price and the monthly payment for the loan.
Question #2 - Compound Interest
Anna decided to tour Europe after finishing high school. To finance her trip, she borrowed $2,500 from her credit union, obtaining a loan with a 6% annual interest rate and quarterly compounding. Ann paid $2,816 when payment for the loan was due. What was the term of Anna's loan?
Question #3 - Mortgage Financing
Josh and Leo found a home they liked costing $210,000. A mortgage company was willing to finance the home at a 4.75% rate and 30-year term if they could make a 20% down payment, allowing them to avoid a monthly private mortgage insurance charge. Calculate the down payment and monthly mortgage payment that Josh and Leo must pay.