2.7.1: Exercises

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Leah Griffith, Veronica Holbrook, Johnny Johnson & Nancy Garcia
Rio Hondo College

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Section 2.7.1 Exercises

You can afford a $700 per month mortgage payment. You’ve found a 30 year loan at 5% interest.
1. How big of a loan can you afford?
2. What would be the total payments made on the loan?
3. How much of that money is interest?
Marie can afford a $250 per month car payment. She’s found a 5 year loan at 7% interest.
1. How expensive of a car can she afford?
2. What would be the total payments made on the loan?
3. How much of that money is interest?
You want to buy a $25,000 car. The company is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?
You decide finance a $12,000 car at 3% compounded monthly for 4 years. What will your monthly payments be? How much interest will you pay over the life of the loan?
You want to buy a $200,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest.
1. How much is the loan amount going to be?
2. What will your monthly payments be if the interest rate is 5%?
3. What will your monthly payments be if the interest rate is 6%?
Lynn bought a $300,000 house, paying 10% down, and financing the rest at 6% interest for 30 years.
1. Find her monthly payments.
2. How much interest will she pay over the life of the loan?
Emile bought a car for $24,000 three years ago. The loan had a 5 year term at 3% interest rate, making monthly payments. How much does he still owe on the car?
A friend bought a house 15 years ago, taking out a $120,000 mortgage at 6% for 30 years, making monthly payments. How much does she still owe on the mortgage?