Personal Finance EXAM 2! [HW3]
You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12%, or 1% a month. If the first payment is $300, how much is the principal portion of the payment? multiple then subtract
270
Chuck obtained a mortgage of $90,000 to finance a $120,000 home. The title search will be $400, appraisal fee $500, application fee $900, and he will pay 1% origination fee. How much are his closing costs? - ADD - MULTIPLE mortgage and percent
2700
You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12%. At the end of the first month, the interest owed on $3,000 is - what is monthly interest? - then calculate first month
3000(0.01) = 30
Tiffany and Jason want to obtain a $72,000 mortgage. Their payments would be $730 for a 15-year mortgage and $579 for a 30-year mortgage. What would be their total savings in interest by using a 15-year mortgage(30)(12) & (15)(12)?
360(579) - 72,000 = 136,440 180(730) - 72,000 = 59,400 77,040
Jarrod has narrowed his choice to two credit cards that may meet his needs. Card A has an APR of 21%. Card B has an APR of 14%, but also charges a $25 annual fee. 1) Jarrod will not pay off his balance each month, but will carry a balance forward of about $400 each month. Which credit card should he choose? add annual to card B only
Card A 400(.21) = 84 Card B 400(.14) = 56 56 + 25 = 81 card b
Lucky Louie applied for a $5,000 loan payable in one year and was provided the following data; interest due at payoff of $750, application fee $100, credit check $75, processing fee $75. What is the APR of Louie's loan? - TC - APR
TC = 750 + 100 + 75 + 75 = 1000 APR = 1000/5000 = 20%
Greg and Kathy are considering purchasing a home requiring an $85,000 mortgage. The payment on a 30-year mortgage for this amount is $605. The payment for a 15-year mortgage is $752. What is the total interest amount paid on a 30-year mortgage? What is the total interest amount paid on a 15-year mortgage? What is the additional amount of interest paid on the 30-year mortgage over 15-year mortgage
360(605) - 85000 = 132800 180(752) - 85000 = 50360 132800 - 50360 = 82440
Teresa rents her apartment for $650 per month, utilities not included. When she moved in, she paid a $700 security deposit using money from her savings account that was paying 3% interest. Her renter's insurance costs her $60 per year. What are Teresa's total annual costs of renting?
650(12) = 7800 7800 + 60 + 21 = 7881
Jack needs to borrow $1,000 for one year. Bank South will give him the loan at 9%. SunCoast Bank will give him the loan at 7% with a $50 loan origination fee. First National will give him the loan at 6% with a $25 loan origination fee. Determine the total interest and fees Jack will be charged in each case. Which loan should Jack choose?
Bank south 1000(.09) = 90 Sun Cost 1000(.07) = 70 70 + 50 = 120 First national 1000(.06) = 60 60+25 = 85 choose First national
Michelle wants to set aside $50 per month for savings. Her bank will pay her 3% per year, compounded monthly. What will Michelle's balance be in 5 years? N I PV PMT FV
N = 5 ∗ 12 = 60 I = 3/12 = 0.25 PV =0 PMT = 50 CPT FV = $3,232.34
Jen spends $10 per week on lottery tickets. If she takes the same amount that she spends on lottery tickets and invests it each week for the next 5 years at 10%, compounded weekly, how much will she have in 5 years?
N = 5 ∗ 52 = 260 I = 10/52 = 0.19 PV =0 PMT = 10 CPT FV = 3,358.37
How much will you have in 36 months if you invest $75 a month at 10% annual interest? N I PV PMT FV
N =36 I = 10/12 = 0.83 PV =0 PMT = 75 CPT FV =3,132
Jarrod has narrowed his choice to two credit cards that may meet his needs. Card A has an APR of 21%. Card B has an APR of 14%, but also charges a $25 annual fee. 2) What if he will carry a balance forward of about $300 each month?
card a 300(.21) = 63 card b 300(.14) = 42 42+15 = 67 card a