Ralph is leasing a $32,000 car for 36 months. The terms of his lease include an 8.5% interest rate (money factor of 0.00354) and a residual value of 72%. Determine Ralph’s approximate monthly lease payment.
Determine the monthly payment of a loan for $3,000 at 7.5% interest compounded monthly for 36 months.
Why do interest rates on loans tend to be higher in a strong economy than in a weak one?
Niki makes the same payment every two months to pay off his $61,600 loan. The loan has an interest rate of 9.84%, compounded every two months. If Niki pays off his loan after exactly eleven years, how much interest will he have paid in total? Round all dollar values to the nearest cent.
Below is an excerpt from the home loan contract Kyle signed with his bank. “The sum of the principal of the loan and all applicable interest will be divided into 360 monthly payments according to the amortization schedule. The Buyer shall make each monthly payment by the first day of the month it is due. A payment not received by the first day of the month it is due will be considered delinquent. A payment not received by the fifteenth day of the month it is due will be subject to a late charge of $75.00. If a payment is not received by the last day of the month it is due, the Buyer and transaction shall be reported to the appropriate credit agencies. In the event of delinquency, the Buyer may divide any payment not received into not more than three equal installments to be included on the next consecutive monthly payments. Notification of the Buyer’s intent to do so must be made by written letter or phone call to the phone number and address listed below within one business week of delinquency.” Kyle failed to make his payment by the first of this month. Kyle’s monthly payment is currently $1,200. If Kyle decides to split the missing payment into two parts and pay it over the next two months, which of the following statements is false?
Calculate the monthly payment for a 5-year car loan of $23,570 at 10.43% interest, compounded monthly.
The principal on Jan’s loan was $4,700, but by the time she had paid it off after four years, the interest and principal totaled $5,388. If Jan made regular quarterly payments of $355 until the loan was paid off, how much did Jan pay for service charges?
The paragraph below comes from the rental agreement Susan signed when she opened her account at Super Video.“All rentals are due back by midnight of the due date as printed on the transaction receipt. Any rental not received by midnight on the day it is due is subject to a late charge of $1.50 for each day it is late. Any rental not returned by the fifth day after the due date will be transferred to a sale. The Customer will then be required to pay the purchase price of the item in addition to five (5) days of late fees. The Customer will not be required to return the product once the total balance is paid.”Susan went into her local Super Video to rent a movie last week. When she had made her choice, she approached the checkout counter where the clerk asked for her ID, scanned her movies and asked for $5.83. Susan gave her a $10 bill and the clerk gave her $4.17 as change as she said, “Thank you, have a good day!”. Which of the following events invalidates the contract Susan signed with Super Video?
Tiffany has taken out a loan with a stated interest rate of 8.145%. How much greater will Tiffany’s effective interest rate be if the interest is compounded weekly than if it is compounded semiannually?
Which of the following is likely to keep Harry from being approved for a loan?
Maria is going to take out a loan with a principal of $19,700. She has narrowed down her options to two banks. Bank M charges an interest rate of 7.1%, compounded monthly, and requires that the loan be paid off in five years. Bank N charges an interest rate of 7.8%, compounded monthly, and requires that the loan be paid off in four years. How would you recommend that Maria choose her loan?
Orlando has a loan with an effective interest rate of 7.918%, compounded annually. Which of the following must be true?I. In the effective rate formula, n is equal to one.II. The nominal rate is 7.918%.III. The Federal Funds Rate is static.
A lender will verify and carefully consider your income before approving you for a loan because _____.
Below is an excerpt from the home loan contract Kyle signed with his bank. “The sum of the principal of the loan and all applicable interest will be divided into 360 monthly payments according to the amortization schedule. The Buyer shall make each monthly payment by the first day of the month it is due. A payment not received by the first day of the month it is due will be considered delinquent. A payment not received by the fifteenth day of the month it is due will be subject to a late charge of $75.00. If a payment is not received by the last day of the month it is due, the Buyer and transaction shall be reported to the appropriate credit agencies. In the event of delinquency, the Buyer may divide any payment not received into not more than three equal installments to be included on the next consecutive monthly payments. Notification of the Buyer’s intent to do so must be made by written letter or phone call to the phone number and address listed below within one business week of delinquency.” Kyle failed to make his payment for this month. He decided to split the missing payment into three installments to be paid over the next three months as described in the contract. Without calling the bank, Kyle sent a check for $1,600 for each of his next three monthly payments. Which action invalidates the contract Kyle signed?
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