Chapter 6.4 National Finance

Determine the monthly interest on a loan with a balance of $168,300, a monthly payment of $1,356.80, and an interest rate of 7.75%? $1,086.94. $1,304.33 $866.67 Cannot be determined.

$1,086.94. $168,300 x 7,75% = $13,043.25 $13,043.25 ÷ 12 = $1,086.94

What is the balance on an amortized loan of $340,000 after the first payment if the interest rate is 6% with a monthly P&I payment of $2,028? $338,300 $339,672.00 $339,020.00 $337,972

$339,672.00 $340,000 x 6% = $20,400 $20,400 ÷ 12 = $1,700, $2,028 - $1,700 = $328 $340,000 - $328 = $339,672

A mortgage has a balance of $70,000 at 11.5% interest for a period of 25 years. The monthly P & I payment is $711.53, what is the interest charge for the second monthly payment? $690.72 $711.53 $670.44 $40.70

$670.44 $70,000 x 11.5% = $8,050, $8,050 ÷ 12 = $670.83, $711.53 - $670.83 = $40.70, $70,000 - $40.70 = $69,959.30 $69,959.30 x 11.5% = $8,045.32 $8,045.32 ÷ 12 = $670.44

When determining a mortgage loan balance, the monthly loan payment interest is added to the balance. principal is added to the balance. interest is deducted from the payment. principal is deducted from the payment.

interest is deducted from the payment.

To determine the monthly principal portion of a monthly loan payment you must deduct the monthly interest from the monthly payment. monthly principal from the monthly payment. yearly interest from the monthly payment. monthly interest from the yearly payment.

monthly interest from the monthly payment.

Remember for purposes of determining the new loan balance, you will not have to know how to determine the principal portion of the loan payment. interest portion of the payment. payment amount. monthly interest amount.

payment amount.