Question 1

Becky Lewis financed the construction of a garage on her lot with a 9.3% add-on interest home improvement loan from the Guaranteed Savings Bank. The total price of the garage was $11,860 and was financed with equal monthly payments for 6 years.
A)What is the total deferred payment price of the garage?
B)How much are the monthly payments on the loan? (Round to the nearest cent)

Accepted Answer

The answer of Becky Lewis financed the construction of a...

Question 2

The Century Corporation has a $50,000 line of credit with Prime Bank. The annual percentage rate is the current prime plus 4.3% based on the average daily balance. The balance of the account on September 1 was $18,200. On September 12 Century borrowed $10,000 to pay for a shipment of merchandise, and on September 18 they borrowed another $5,200 for equipment rental. On September 25 a $20,000 payment was made on the account. The current prime rate is 6 1/2%.
A)What is the finance charge on the account?
B)What is Century's new balance?

Accepted Answer

The answer of The Century Corporation has a $50,000 line...

Question 3

Commerce Bank & Trust Company offers a business line of credit that has an annual percentage rate of prime plus 4.8%, with a minimum of 11 1/2%. If the prime rate is 6.25%, what is the APR? (Round to the nearest hundredth of a percent)

Accepted Answer

The answer of Commerce Bank & Trust Company offers a...

Question 4

Inga Suave has a revolving department store credit card with an annual percentage rate of 18%. Her previous month's balance is $826.39. During August, she has purchases of $289.16, returns of $29.99, and made a payment of $126.50. The store uses the unpaid balance method to calculate finance charges.
A)What is the amount of the finance charge for August?
B)What is Inga's new balance?

Accepted Answer

The answer of Inga Suave has a revolving department store...

Question 5

The Aventura Country Club purchased a new lawn mower for $10,600. A down payment of $2,500 was made and the balance financed with monthly payments of $415.13 for 24 months.
A)What is the amount of the finance charge on the loan?
B)Use the APR Table 13-1 from your text to find what annual percentage rate was charged on the loan.

Accepted Answer

The answer of The Aventura Country Club purchased a new...

Question 6

Bill Hopen has a Bank Card revolving credit account with a 18% annual percentage rate. The billing date is the first day of each month and the billing cycle is the number of days in that month. Bill's balance at the end of July was $728.15. The activity for the month was as follows: August 10, purchase of $136.19; August 15, payment of $292; August 23, purchase of $386.78. What was the average daily balance for August? (Round to the nearest cent)

Accepted Answer

The answer of Bill Hopen has a Bank Card revolving...

Question 7

Robert Smith's average daily balance for May on his revolving credit account was $267.56. The annual percentage rate is 15%. How much is the finance charge for May? (Round to the nearest cent)

Accepted Answer

The answer of Robert Smith's average daily balance for May...

Question 8

Marcos has a revolving credit account at an annual percentage rate of 15%. Use the average daily balance method to find the new balance given the following statement of account: $$\begin{array}{l}
\text { STATEMENT OF ACCOUNT Billing cycle: January 1-31 }\
\begin{array} { | l | l | l | } 
\hline \text { January 1 } & \text { Previous month's balance } & \$ 496.25 \
\hline \text { January } 9 & \text { Payment } & 73.80 \
\hline \text { January 15 } & \text { Sonoma Vineyards (credit) } & 115.68 \
\hline \text { January 21 } & \text { Pets Plus } & 120.80 \
\hline \text { January 29 } & \text { Flying Express } & 66.93 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Marcos has a revolving credit account at...

Question 9

Amani purchased a living room set that cost $2,700. She made a down payment of $700 and financed the balance with an installment loan for 36 months. If the payments are $65.25 each month, use Table 13-1 from your text to find the APR.

Accepted Answer

The answer of Amani purchased a living room set that...

Question 10

The following installment loan is being paid off early. Calculate the rebate fraction, the finance charge rebate, and the loan payoff for the loan, rounding dollars to the nearest cent: $$\begin{array} { l l l l l l l } 
& \text { Total } & & \text { Number of } & & \text { Finance } \
\text { Amount } & \text { Number of } & \text { Monthly } & \text { Payments } & \text { Rebate } & \text { Charge } & \text { Loan } \
\text { Financed } & \text { Payments } & \text { Payment } & \text { Remaining } & \text { Fraction } & \text { Rebate } & \text { Payoff } \
\$ 800 & 15 & \$ 62.50 & 9 & & &
\end{array}$$

Accepted Answer

The answer of The following installment loan is being paid...

Question 11

Chuck Widle bought a Jeep for a cash price of $24,900. He made a 15.5% down payment and financed the balance with payments of $395.47 per month for 60 months. What was the amount of the finance charge on this loan?

Accepted Answer

The answer of Chuck Widle bought a Jeep for a...

Question 12

Sam Hicks found a car he wanted to buy. She had the option of paying $10,600 in cash or financing the car with a 3-year installment loan. The loan required a 25% down payment and equal monthly payments of $131.42 What is the total deferred payment price of the car?

Accepted Answer

The answer of Sam Hicks found a car he wanted...

Question 13

Frog's Leap Vineyards has a $45,000 line of credit which charges an annual percentage rate of prime rate plus 6.5%. The starting balance on March 1 was $4,200. On March 8, they made a payment of $2,000, and on March 16, they borrowed $4,400. If the current prime rate is 10%, what is the new balance?

Accepted Answer

The answer of Frog's Leap Vineyards has a $45,000 line...

Question 14

The following installment loan is being paid off early. Calculate the rebate fraction, the finance charge rebate, and the loan payoff for the loan, rounding dollars to the nearest cent: $$\begin{array} { l l l l l l l } 
& \text { Total } & & \text { Number of } & { \text { Finance } } \
\text { Amount } & \text { Number of } & \text { Monthly } & \text { Payments } & \text { Rebate } & \text { Charge } & \text { Loan } \
\text { Financed } & \text { Payments } & \text { Payment } & \text { Remaining } & \text { Fraction } & \text { Rebate } & \text { Payoff } \
\$ 15,000 & 24 & \$ 812.50 & 6 & & &
\end{array}$$

Accepted Answer

The answer of The following installment loan is being paid...

Question 15

Jan purchased a new tool set costing $899.99 by taking out a 7.25% add-on installment interest from her credit union. She is paying the loan in equal payments over one year. How much are Jan's monthly payments? (Round to the nearest cent)

Accepted Answer

The answer of Jan purchased a new tool set costing...

Question 16

Johnston Bros. purchased a new $11,850 freezer for their seafood shop with a 36-month installment loan. The monthly payments are $417.67 per month.
A)Use the APR formula to calculate the annual percentage rate of the loan. (Round to the nearest hundredth of a percent)
B)Use the APR Table 13-1 from your text to calculate the annual percentage rate of the loan.

Accepted Answer

The answer of Johnston Bros. purchased a new $11,850 freezer...

Question 17

Janita purchased a luggage set costing $649.99 by taking out a 5.35% add-on installment interest from her local bank. She is paying the loan in equal payments over one year. How much are Janita's monthly payments? (Round to the nearest cent)

Accepted Answer

The answer of Janita purchased a luggage set costing $649.99...

Question 18

Suppose you have a revolving credit account at an annual percentage rate of 15%, and your previous monthly balance is $249.83. Find your new balance if your account showed the following activity. (Use the unpaid balance method) $$\begin{array}{l}
\text { STATEMENT OF ACCOUNT Billing cycle: September 1-30 }\
\begin{array} { | l | l | l | } 
\hline \text { September } 6 & \text { Payment } & \$ 41.25 \
\hline \text { September } 9 & \text { Craig's Consulting } & 88.24 \
\hline \text { September } 13 & \text { Larry's Lube } & 56.06 \
\hline \text { September } 21 & \text { Sarah's Software } & 30.25 \
\hline \text { September } 26 & \text { Mountan Vineyards (credit) } & 34.49 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Suppose you have a revolving credit account...

Question 19

Omar purchased a dining set costing $1,800. He made a down payment of $500 and financed the balance with an installment loan for 36 months. If the payments are $42.25 each month, use Table 13-1 from your text to find the APR.

Accepted Answer

The answer of Omar purchased a dining set costing $1,800....

Question 20

Artimus Price's previous month's balance on his revolving credit account was $1,216.88. The account had the following activity for May: May 10, purchases $270; May 15, a credit of $86.50; May 19, payment of $300; and May 25, purchase $122.25. The finance charge is calculated on the average daily balance at a 15% annual percentage rate.
A)What is Artimus' new balance on May 31?
B)How much is the finance charge for May?

Accepted Answer

The answer of Artimus Price's previous month's balance on his...

Quiz 13: Consumer and Business Credit