Question 1

A sedan was purchased for $20,000. A down payment of 8% of the purchase price was required. How much was the down payment?

Accepted Answer

The down payment is 8% of $20,000, which is calculated as 0.08 * $20,000 = $1,600.

Question 2

Your state charges a license fee of 1.4% on the purchase price of a car. How much is the license fee for a car that costs $14,498?

Accepted Answer

To find the license fee, we need to multiply the purchase price of the car by the license fee percentage.
License fee = purchase price x license fee percentage
License fee = $14,498 x 1.4%
License fee = $14,498 x 0.014
License fee = $202.97
Therefore, the license fee for a car that costs $14,498 is $202.97.

Question 3

A real estate agent receives a 4% commission for selling a house. Find the commission the agent earned for selling a house for $156,000.

Accepted Answer

The commission is calculated as 4% of $156,000. So, 0.04 * 156,000 = $6,240.

Question 4

A & L Lumber Company purchased a delivery truck for $27,000. A sales tax of 4% of the purchase price was paid. Find the sales tax.

Accepted Answer

To find the sales tax, we need to multiply the purchase price by the tax rate: 
Sales tax = $27,000 x 0.04 = $1080 
Therefore, the best choice is (B) $1080.

Question 5

Maria Hernandez purchased a home for $190,000 and made a down payment of $10,000. The balance was financed for 25 years at an annual interest rate of 6%. Find the monthly mortgage payment.

Accepted Answer

First, we need to find the total amount financed:

Total amount financed = Purchase price - Down payment
Total amount financed = $190,000 - $10,000
Total amount financed = $180,000

Next, we need to find the monthly interest rate:

Monthly interest rate = Annual interest rate / 12
Monthly interest rate = 6% / 12
Monthly interest rate = 0.005

Finally, we can use the formula for a fixed-term, fixed-rate mortgage to find the monthly payment:

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

Where:
M = Monthly mortgage payment
P = Total amount financed
i = Monthly interest rate
n = Number of payments (in months)

Plugging in the values we have:

M = $180,000 [ 0.005(1 + 0.005)^(25*12) ] / [ (1 + 0.005)^(25*12) - 1 ]

M = $180,000 [ 0.005(1.005)^300 ] / [ (1.005)^300 - 1 ]

M = $180,000 [ 0.005 x 3.063 ] / [ 3.063 - 1 ]

M = $865.03

Therefore, the monthly mortgage payment is $1159.74, which is closest to option B.

Question 6

Maria Hernandez purchased a home for $100,000 and made a down payment of $30,000. The balance was financed for 25 years at an annual interest rate of 8%. Find the monthly mortgage payment.

Accepted Answer

First, we need to calculate the balance that was financed:
Balance = $100,000 - $30,000 = $70,000

Next, we can use the formula for a mortgage payment:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:
M = monthly mortgage payment
P = the principal, which is the amount of the mortgage
i = the annual interest rate divided by 12 (to get the monthly rate)
n = number of payments (in this case, 25 years * 12 months = 300)

Plugging in our values:
M = $70,000 [ 0.08/12 (1 + 0.08/12)^300 ] / [ (1 + 0.08/12)^300 – 1]
M ≈ $540.27

Therefore, the answer is choice C, $540.27.

Question 7

Keisha Brown receives an annual salary of $30,900 as an Italian language teacher. How much does Keisha receive each month?

Accepted Answer

To find the monthly salary, divide the annual salary by 12 months: $30,900 / 12 = $2,575.

Question 8

A family spent $1900 on gas, oil, and car insurance during a period in which the car was driven 15,000 miles. Find the cost per mile for gas, oil, and car insurance.

Accepted Answer

The answer of A family spent $1900 on gas, oil,...

Question 9

Susan Hernandez purchased a home for $200,000 and made a down payment of $20,000. The balance was financed for 20 years at an annual interest rate of 4%. Find the monthly mortgage payment.

Accepted Answer

The answer of Susan Hernandez purchased a home for $200,000...

Question 10

A car loan of $22,000 is financed for 3 years at an annual interest rate of 9%. Find the monthly car payment.

Accepted Answer

The monthly car payment can be calculated using the formula for a fixed installment loan: $M = P \frac{r(1+r)^n}{(1+r)^n - 1}$, where $M$ is the monthly payment, $P$ is the principal amount ($22,000), $r$ is the monthly interest rate (annual rate divided by 12, so $0.09/12$), and $n$ is the total number of payments (3 years times 12 months/year = 36 months). Plugging in the values: $M = 22000 \frac{(0.09/12)(1+0.09/12)^{36}}{(1+0.09/12)^{36} - 1}$, calculating this gives approximately $699.59.

Question 11

A carpenter bought a utility van for $21,000 and made a down payment of 20% of the purchase price. 
a) Find the down payment.
b) Find the amount financed.

Accepted Answer

a) 20% of $21,000 is $4,200, so the down payment is $4,200.
b) The amount financed is the purchase price minus the down payment, so it is $21,000 - $4,200 = $16,800.
Therefore, the answer is C, which matches both of these values.

Question 12

A camper is purchased for $29,000, and a down payment of $7000 is made. The balance is financed for 1 year at an annual interest rate of 6%. Find the monthly payment.

Accepted Answer

The answer of A camper is purchased for $29,000, and...

Question 13

A vacation home has a mortgage of $120,000 for 15 years at an annual interest rate of 6%. a. Find the monthly mortgage payment.
b. During a month when $384.8 of the monthly mortgage payment is principal, how much of the payment is interest?

Accepted Answer

a. We can use the formula for the monthly payment of a mortgage given by:

P = (r(PV))/(1-(1+r)^(-n))

where P is the monthly payment, r is the monthly interest rate, PV is the present value of the loan (in this case, $120,000), and n is the total number of payments (in this case, 15 years or 180 months).

First, we need to find the monthly interest rate. Since the annual rate is 6%, the monthly rate is 6%/12 = 0.005.

Plugging this into the formula, we get:

P = (0.005(120000))/(1-(1+0.005)^(-180)) = $1012.63

So the monthly mortgage payment is $1012.63.

b. We know that the total monthly payment is $1012.63, and $384.8 of that is going toward principal. To find how much is going toward interest, we can subtract the principal payment from the total payment:

Interest payment = Total payment - Principal payment
Interest payment = $1012.63 - $384.8
Interest payment = $627.83

So during a month when $384.8 of the monthly mortgage payment is principal, $627.83 of the payment is interest.

Question 14

The monthly mortgage payment on a home is $783.40, and the homeowner pays an annual property tax of $648. Find the total monthly payment for the mortgage and property tax.

Accepted Answer

To find the total monthly payment, we simply add the monthly mortgage payment to the monthly property tax payment:

$783.40 + ($648 / 12)

= $783.40 + $54

= $837.40

Therefore, the total monthly payment for the mortgage and property tax is $837.40, which is answer choice E.

Question 15

A car is purchased for $16,999, and a down payment of $999 is made. The balance is financed for 5 years at an annual interest rate of 5%. Find the monthly car payment.

Accepted Answer

The answer of A car is purchased for $16,999, and...

Question 16

Lewis works in a clothing store and earns $9.50 per hour. How much does he earn in a 30-hour work week?

Accepted Answer

To calculate Lewis' earnings, we need to multiply his hourly rate by the number of hours worked in a week. 
$9.50/hour x 30 hours = $285. Therefore, Lewis earns $285 in a 30-hour work week.

Question 17

A car loan of $15,000 is financed for 4 years at an annual interest rate of 10%. Find the monthly car payment.

Accepted Answer

First, we need to calculate the monthly interest rate:

10% / 12 = 0.00833

Next, we need to calculate the total number of months:

4 years x 12 months/year = 48 months

Now we can use the following formula to find the monthly payment:

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

Where:
M = Monthly payment
P = Loan amount ($15,000)
i = Monthly interest rate (0.00833)
n = Total number of months (48)

Plugging in these values, we get:

M = 15000 [ 0.00833(1 + 0.00833)^48 ] / [ (1 + 0.00833)^48 – 1]

M = $380.44

Therefore, the best choice is B, as it is the calculated monthly payment.

Question 18

An estimate of the cost of owning a compact car is $0.36 per mile. Using this estimate, find how much it costs to operate a car during a year in which the car is driven 11,000 miles.

Accepted Answer

The answer of An estimate of the cost of owning...

Question 19

A couple considering a mortgage of $80,000 have a choice of loans. One loan is an 8% loan for 20 years, and the other loan is at 7% for 20 years. Find the amount of interest that the couple can save by choosing the 20-year loan.

Accepted Answer

The answer of A couple considering a mortgage of $80,000...

Question 20

An author bought a sports car for $30,000 and made a down payment of 15% of the purchase price. Find the amount financed.

Accepted Answer

To find the amount financed, we need to subtract the down payment from the purchase price:

Purchase price = $30,000
Down payment = 15% of $30,000 = $4,500

Amount financed = $30,000 - $4,500 = $25,500

Therefore, the correct answer is D.

Quiz 6: Applications for Business