Mathematics of Personal Finance Practice Assignment: Loans and Payments
1. What term is used to name a type of loan in which the loan amount and interest are due in one payment at maturity?
2. Rosalinda got a payday loan for $2000, due in 2 weeks, and she paid a $150 fee. What is the APR on Rosalinda's loan?
3. Bobby took out a single loan for $500 and paid a $50 fee. His loan is due in 1 week. Find the effective interest rate on the loan Bobby took out. Round the answer to one decimal place.
4. What term is used to describe a type of purchasing arrangement where a seller holds an item for the buyer and allows the buyer to pay it off in a series of payments?
5. Suppose you buy a $1999 LCD TV on layaway. If you pay 5% down and make $50 payments every week, how many weeks will it be before you pay off the TV?
6. Rent-a-Furniture Center is offering a living room set that retails for $799 for $25 per week for 1 year. What is the percent markup on this furniture set?
7. A car that retails for $14,999 has a sticker on the windshield that says, "$429/mo for 48 months." What interest rate is this car financed at?
8. What term is used to describe a systematic repayment of a loan through a set number of payments at a specific interest rate?
9. Suppose you take out a car loan for $9999 for 4 years at a 7.5% interest rate. What is your monthly payment?
10. Sheila bought a new computer for $2000 and has agreed to finance it at 12% interest, with $100 payments each month. When she makes her first payment next month, how much will she pay for interest alone?
11. Tiana can afford $150 per month for a car payment. Her bank preapproved her for a 6% interest rate for 5 years. What is the maximum price of a car Tiana can afford?
12. John and Kathy are shopping for their first home. Between the two of them, they feel they can afford a $1400 monthly house payment. The bank has already preapproved them for a 30-year loan with 5.4% interest. What is the maximum house price John and Kathy can afford?
13. Marco took out an unsubsidized student loan for $20,000, which he will start paying in 4 years, after he graduates. If the interest rate is 4.2%, what is the amount he will owe once he graduates?
14. Leo decides to buy a car for $9600 with a 5-year finance plan that offers 0% financing for the first year. The APR after that will be 3.9%. Interest is compounded monthly. How much will his monthly payment be if he makes payments of $150 per month during the first year?
15. A type of student loan that offers no payments and no interest until graduation is called:
16. Cristina financed a $799 laptop with a 7.2% interest rate on a 2-year loan. If she can afford to make a $75 payment, how quickly can she pay off her laptop?
17. What expression is equivalent to log(200) - log (2)? Calculate the answer.
18. What is the term used for unscheduled full or partial payment of the principal amount outstanding on a loan before its due date?
19. Jose has decided to pay off his $20,000 car loan. He has been making payments of $444.89 and has 15 months left to pay. His loan has a 12% interest rate and is to be paid off in 5 years. How much will he need to make his payment to fully pay off the car?
20. Jesse took out a $14,000 car loan for 5 years at a 7.2% interest rate. Find Jesse's total payment amount for this loan.