Loans Assessment Analysis

Classify the following loan types as secured or unsecured.

Groups:

(a) Secured

,

(b) Unsecured

• 
• 
• 
• 
• 
• 

If there is a 6.25% sales tax on a $35.50 item, how much will you pay for the item plus tax?

Mathematical Equivalence

ON

A $150,000 dollar loan can be paid off in two years with monthly payments of $6,784.09

What will be total interest paid?

• $12,818.16

• $12,453.65

• $12,692.24

• $12,007.45

As you progress through paying off an installment loan, the individual value of your principal payments will ​ (a)   , interest payments will ​ (b)   , and your loan balance will ​ (c)   .

• decrease
• increase
• remain the same
• also remain the same
• also increase
• also decrease

Joan takes out a $65,000.00 home equity lone to build a pool in the backyard of her house. Her loan will have an interest rate of 6% and she will make monthly payments of $1,077.24. How many years will it take Joan to pay off her loan?

• 4 years

• 5 years

• 6 years

• 8 years

Which of the following could decrease the monthly payment of a loan?

• Raising the interest rate

• Increasing the term length

• Accepting a variable interest rate

• Decreasing the term length

Which of the following could increase the monthly payment of a loan?

• Raising the interest rate

• Increasing the term length

• Accepting a variable interest rate

• Decreasing the term length

Matt takes out a fixed, 30-year mortgage on a $25.00 minecraft house. If the APR is 8.5%, what will his monthly payment be?

Mathematical Equivalence

ON

A 5-year car loan worth $15,060.00 has an interest rate of 8%.

Which of the following commands will give the monthly payment of the loan?

• = pmt( 0.08/12 , 60 , 15,060 )

• = pmt( 0.08/12 , 5 , 15060 )

• = pmt( 0.08/12 , 60 , 15060 )

• = pmt( 0.08 , 60 , 15060 )

A mortgage worth $700,500.00 has an interest rate of 8.75% and a monthly payment of $5,510.84.

Which of the following commands will give number of periods?

• = nper( 0.0875/12, 5510.84 , 700500 )

• = nper( 0.0875/12, -5510.84 , 700500 )

• = nper( 0.0875, 5510.84 , 700500 )

• = nper( 0.0875/12, -5510.84 , 700,500 )