Question 1

Use an amortization table to solve the problem. Round to the nearest cent.
-The monthly payments on a $73,000 loan at 13% annual interest are $807.38.How much of the first monthly payment will go toward the principal?
A)$104.96
B)$790.83
C)$16.55
D)$702.42

Accepted Answer

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Question 2

A $7,000 debt is to be amortized in 15 equal monthly payments of $504.87 at 1.00% interest per month on the unpaid balance.What is the unpaid balance after the second payment?

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Question 3

A $90,000 home was financed by making a 20% down payment and signing a 30-year mortgage at 6.25% annual interest compounded monthly for the unpaid balance.The first payment is $443.32.How much of the first month's payment will apply towards reducing the principal?

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Question 4

Solve the problem. Round to the nearest cent as needed.
-The monthly payments on a $73,000 loan at 13% annual interest are $807.38.How much of the first monthly payment will go toward the principal?
A)$790.83
B)$104.96
C)$702.42
D)$16.55

Accepted Answer

The answer of Solve the problem. Round to the nearest...

Question 5

A bank makes a home mortgage loan of $180,000 at 7.25% amortized in equal monthly payments over 30 years.
What is the total amount paid in interest when the mortgage is paid off (round to the nearest dollar)?

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Question 6

You have decided to buy a new stereo system for $2,500 and agreed to pay in 30 equal quarterly payments at
1.25% interest per quarter on the unpaid balance.How much are your payments?

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The answer of You have decided to buy a new...

Question 7

Solve the problem. Round to the nearest cent as needed.
-The monthly payments on a $79,000 loan at 14% annual interest are $982.76.How much of the first monthly payment will go toward interest?
A)$921.67
B)$845.17
C)$137.59
D)$1106.00

Accepted Answer

The interest for the first month is calculated on the initial loan amount. At 14% annual interest, the monthly interest rate is 14% / 12 = 1.1667%. The interest for the first month is $79,000 * 1.1667% = $921.67.

Question 8

Solve the problem. Assume no new purchases are made with the credit card.
-The annual interest rate on a credit card is 20.99%.If a payment of $100.00 is made each month,how long will it take to pay off an unpaid balance of $1546.15?
A)19 months
B)18 months
C)13 months
D)21 months

Accepted Answer

To find out how many months it will take to pay off the balance, we need to use the formula:

Number of months = (-1/30) x log(1 + (r/p) x (1 - (1+i)^(-n)))

where:
r = annual interest rate (as a decimal) = 0.2099
i = monthly interest rate = r/12 = 0.01749
p = monthly payment = $100
n = number of months

Plugging in the values, we get:

n = (-1/30) x log(1 + (0.2099/12)/(1 - (1+0.01749)^(-n))) x 12

Simplifying this equation gives us:

n = 19.07

Since we can't have partial months, we round up to the nearest whole number, giving us:

n = 19 months

Therefore, the best choice is A) 19 months.

Question 9

A home was purchased 14 years ago for $70,000.The home was financed by paying a 20% down payment and signing a 25 year mortgage at 8.5% compounded monthly on the unpaid balance.The market value is now
$100,000.The owner wishes to sell the house.How much equity (to the nearest dollar)does the owner have in the house after making 168 monthly payments?

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Question 10

Find the monthly house payment necessary to amortize the following loan.
-In order to purchase a home,a family borrows $70,000 at 12% for 15 years.What is the monthly payment?
A)$902.99
B)$700.00
C)$46.67
D)$840.12

Accepted Answer

To calculate the monthly payment necessary for this loan, we can use the formula for calculating the monthly payment on an amortized loan:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:
M = monthly payment
P = principal amount (the amount borrowed)
i = interest rate per month (annual rate divided by 12)
n = total number of payments (15 years x 12 months per year = 180 payments)

Plugging in the values for this loan, we get:

M = $70,000 [ 0.01(1 + 0.01)^180 ] / [ (1 + 0.01)^180 – 1]
M = $840.12

Therefore, the monthly house payment necessary to amortize this loan is $840.12, which is answer choice D.

Question 11

You have purchased a new house and have a mortgage for $90,000 at 6% compounded monthly.The loan is amortized over 20 years in equal monthly payments of $644.79.Find the total amount paid in interest when the mortgage is paid off.

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Question 12

Find the payment necessary to amortize the loan.
-$2200; 12% compounded quarterly; 8 quarterly payments
A)$282.23
B)$313.64
C)$442.87
D)$313.40

Accepted Answer

First, we need to calculate the quarterly interest rate:
12% divided by 4 quarters = 0.03 or 3%
Next, we need to calculate the total number of periods:
8 quarterly payments = 2 years (8 quarters in 2 years)
Now we can use the formula to find the payment necessary to amortize the loan:
Payment = (Loan amount * quarterly interest rate) / (1 - (1 + quarterly interest rate)^(-total number of periods))
Payment = (2200 * 0.03) / (1 - (1 + 0.03)^(-8)) = $313.40
Therefore, the best choice is D.

Question 13

You have agreed to pay off a $8,000 loan in 30 monthly payments of $298.79 per month.The interest rate of the loan is 0.75% per month on the unpaid balance.What is the unpaid balance after 12 monthly payments have been made?

Accepted Answer

The answer of You have agreed to pay off a...

Question 14

Find the monthly house payment necessary to amortize the following loan.
-In order to purchase a home,a family borrows $267,000 at 10.8% for 15 yr.What is their monthly payment? Round the answer to the nearest cent.
A)$3394.52
B)$19,108.39
C)$2403.00
D)$3001.27

Accepted Answer

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Question 15

Use an amortization table to solve the problem. Round to the nearest cent.
-The monthly payments on a $76,000 loan at 12% annual interest are $836.76.How much of the first monthly payment will go toward interest?
A)$100.41
B)$736.35
C)$760.00
D)$912.00

Accepted Answer

To calculate the interest portion of the first monthly payment on a loan, you use the annual interest rate and the initial loan balance. The formula to calculate the interest for the first month is: (Annual Interest Rate / 12) * Initial Loan Balance. With an annual interest rate of 12% and an initial loan balance of $76,000, the calculation is: (0.12 / 12) * $76,000 = $760.00. Therefore, $760.00 of the first monthly payment will go toward interest.

Quiz 3: Mathematics of Finance

Use an amortization table to solve the problem. Round to the nearest cent. -The monthly payments on a $73,000 loan at 13% annual interest are $807.38.How much of the first monthly payment will go toward the principal?

A $7,000 debt is to be amortized in 15 equal monthly payments of $504.87 at 1.00% interest per month on the unpaid balance.What is the unpaid balance after the second payment?

A $90,000 home was financed by making a 20% down payment and signing a 30-year mortgage at 6.25% annual interest compounded monthly for the unpaid balance.The first payment is $443.32.How much of the first month's payment will apply towards reducing the principal?

Solve the problem. Round to the nearest cent as needed. -The monthly payments on a $73,000 loan at 13% annual interest are $807.38.How much of the first monthly payment will go toward the principal?

A bank makes a home mortgage loan of $180,000 at 7.25% amortized in equal monthly payments over 30 years. What is the total amount paid in interest when the mortgage is paid off (round to the nearest dollar)?

You have decided to buy a new stereo system for $2,500 and agreed to pay in 30 equal quarterly payments at 1.25% interest per quarter on the unpaid balance.How much are your payments?

Solve the problem. Round to the nearest cent as needed. -The monthly payments on a $79,000 loan at 14% annual interest are $982.76.How much of the first monthly payment will go toward interest?

Solve the problem. Assume no new purchases are made with the credit card. -The annual interest rate on a credit card is 20.99%.If a payment of $100.00 is made each month,how long will it take to pay off an unpaid balance of $1546.15?

Find the monthly house payment necessary to amortize the following loan. -In order to purchase a home,a family borrows $70,000 at 12% for 15 years.What is the monthly payment?

You have purchased a new house and have a mortgage for $90,000 at 6% compounded monthly.The loan is amortized over 20 years in equal monthly payments of $644.79.Find the total amount paid in interest when the mortgage is paid off.

Find the payment necessary to amortize the loan. -$2200; 12% compounded quarterly; 8 quarterly payments

You have agreed to pay off a $8,000 loan in 30 monthly payments of $298.79 per month.The interest rate of the loan is 0.75% per month on the unpaid balance.What is the unpaid balance after 12 monthly payments have been made?

Find the monthly house payment necessary to amortize the following loan. -In order to purchase a home,a family borrows $267,000 at 10.8% for 15 yr.What is their monthly payment? Round the answer to the nearest cent.

Use an amortization table to solve the problem. Round to the nearest cent. -The monthly payments on a $76,000 loan at 12% annual interest are $836.76.How much of the first monthly payment will go toward interest?