Answers2025-2026 GSP Mathematical Reasoning for Decision MakingTest

Personal Loans Answers

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1
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Annie would like to take out a loan to put a new playground in her yard for her kids. She offers her car which is worth $7,800 as collateral. The loan officer at the bank is permitted to loan Annie 92% of the value of her collateral. How much will Annie be able to borrow for the playground using her car as collateral?

A
$7,708.00
B
$7,176.00
C
$7,800.00
D
$8,478.26
2
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Determine the finance charge on an $8,000 loan with a monthly payment of $162.80 for 60 months.

A
$29.47
B
$162.80
C
$1,768.00
D
$9,768.00
3

Jason used his car as collateral to borrow money from his bank. After losing his job, Jason is now unable to make his monthly payments for the loan, defaulting on the loan. If Jason is unable to continue to make his payments, what is likely to happen to his car?

A
The bank will ask Jason to sell the car to help pay back his loan.
B
The bank will seize the car and likely sell it to pay off Jason’s loan.
C
The bank will notify the local government of Jason’s default on his loan, making it illegal for Jason to drive the car.
D
The bank will put a “boot” on one wheel of the car, making it un-drivable until Jason begins making his payments again.
4

In a secured loan, collateral is _____.

A
valuable property that the borrower promises to give the lender in the event of default on the loan
B
an agreement made in civil court agreeing that the borrower may be arrested in the event of default on the loan
C
an agreement signed by a co-borrower promising to pay the loan in the event the primary borrower defaults on the loan
D
and insurance policy taken out by the lender and paid for by the borrower to cover the lender from loss in the event of default
5

Ricky is taking out a personal loan for $12,000 to remodel his kitchen. He would like the lowest monthly payment possible, even if it means a bigger finance charge in the end. His bank has offered him a loan at 13% interest for 36 months or 12% interest for 60 months, both of which are compounded monthly. Which of the following statements most accurately describes what Ricky should be thinking?

A
More payments with the 60 month loan will give him the lowest monthly payment.
B
Fewer payments with the 36 month loan will give him the lowest monthly payment.
C
The 60 month loan comes with a bigger finance charge and, thus, a bigger monthly payment.
D
The 36 month loan comes with a bigger finance charge and, thus, a bigger monthly payment.
6

Susan took out a personal loan for $3,500 at an interest rate of 13% compounded monthly. She made arrangements to pay the loan off in 3 years. What will her monthly payment be?

A
$99.34
B
$105.32
C
$117.93
D
$156.60
7

In calculating the monthly payment for a five-year loan, what value should be used for n, the number of periods over which the loan is repaid, as it appears in the following formula?

Question illustration
A
5
B
12
C
60
D
120
8

What would the monthly payment be for a $5,000 loan with a 6.25% interest rate compounded monthly spread over 60 months?

A
$25.31
B
$97.25
C
$217.00
D
$320.95
9

What is the total finance charge for a $4,250 loan at 13.25% interest compounded monthly for 24 months?

A
$25.47
B
$202.55
C
$611.20
D
$4,861.20
10

Tim and Sally are taking out a personal loan to pay for their wedding expenses. The loan is for $9,000 and comes with an interest rate of 9.5% compounded monthly. The couple wants to pay the loan off as quickly as possible, keeping the monthly payments below $250. The lender offers repayment plans in 12 month increments. How long of a loan should they request?

A
24 months
B
36 months
C
48 months
D
60 months

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