Interest Rates

Miranda is buying a house and will need to borrow $150,000 after she makes her down payment. She can choose a 25 year mortgage or a 30 year mortgage at an interest rate of 3% compounded annually. How much more will the 30 year mortgage cost than the 25 year mortgage?

• $22,500.00

• $50,022.68

• $134,970.00

• $173,891.11

Miranda has another offer from a bank offering 2.7% annual compound interest on her 25 year, $150,000 mortgage. How much would she save with a 2.7% interest rate rather than a 3% interest rate?

• $22,087.20

• $101,225.00

• $112,500.00

• $161,664.47

David is buying his first car and will need to borrow $12,000 from his parents, who are offering a 5% simple interest rate. He can take out a loan for a period anywhere between 1 year and 5 years. How much more would a 5 year loan cost him than a 1 year loan?

• $2,715.38

• $2,400.00

• $2,995.00

• $14,586.08

Peggy is renovating her home and needs a $32,000 loan to pay for the renovations. The bank offers her a 4.8% annual compound interest rate if she pays it off in 3 to 5 years. How much more would Peggy pay for the 5 year loan than the 3 year loan?

• $2,100.34

• $3,072.00

• $3,145.73

• $3,620.80

Another bank offers Peggy a 4.2% annual compound interest rate. How much will she save on the $32,000 3-year loan by using the bank with the 4.2% interest rate rather than the 4.8% interest rate?

• $576.00

• $579.46

• $594.83

• $629.00

Morgan can purchase a new car through the dealer at 2.1% annual compound interest over 7 years or through the bank at 3.5% annual compound interest over 7 years. How much would she save with the 2.1% interest rate on a $17,000 car loan?

• $1,666.00

• $1,737.63

• $1,966.68

• $2,162.87

Morgan’s bank could give her a 2.1% annual compound interest rate if she pays off the loan in 3 years. How much would she save by paying off the $17,000 loan in 3 years instead of 7 years?

• $1,568.42

• $1,809.36

• $1,966.21

• $2,499.00

Calculate the amount of interest received.

$30,000 at 4% for 3 years

• $33,745.92

• $1,200.00

• $3,600.00

• 3,745.92

Use simple interest to find the ending balance.

$800 at 7% for 6 years

• $336.00

• $1,200.58

• $400.58

• $1,136.00

Calculate the amount of interest received.

$15,000 at 3% for 5 years

• $2,250.00

• $225,000.00

• $17,250.00

• $17,389.11