11/11/21: Loan Length, Interest, Cost of College

11/11/21: Loan Length, Interest, Cost of College

Be sure you have your notebook, a pencil, and your calculator before you get started

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​Please take notes on each of the videos on this Quizizz. I will look at your notes on Monday when I return. Yes, it is a grade.

Personal Financial Literacy

• 8.12A How interest rate and loan length affect the cost of credit *Video

• 8.12D Calculate and compare simple interest and compound interest earnings

• 8.12G Estimate the cost of a two-year and four-year college education for at least the first year

Multiple Choice

Pete's total repayment amount is $14,770 on an initial loan amount of $11,000. How much did he pay in interest?

• $11,000

• $14,770

• $3,770

• $25,770

Multiple Choice

Sean pays of a 2 year loan at $57 per month. What is his total repayment amount? HINT: How many months are there in 2 years? So, how many $57 payments did he have to pay?

• $114

• $57

• $1368

• $1200

Multiple Choice

To pay off a personal loan, John must make a monthly payment of $120 for 1 year. How much money must John pay back?

• $120

• $121

• $12

• $1440

Multiple Choice

Will takes out a loan of $6000 at 5% interest. The loan term is 2 years, with a monthly payment of $275. What is his total repayment amount?

• $6000

• $600

• $6600

• $550

Try this problem. See next slide for explanation.

Using simple interest to determine the effect the interest rate has on a loan

I = Prt

Multiple Choice

Mr. Fitch needs to get a loan to replace the air-conditioning system in his home. The cost of the replacement, including installation, is $4,348.00.

He can apply for a 5-year loan or a 3-year loan. Both loans involve simple interest with an annual interest rate of 6.5%.

If Mr. Fitch applies for the 5-year loan, how much more will he pay in interest than with the 3-year loan? HINT: Use I = Prt twice

• $704.98

• $565.24

• $2,260.96

• $5,652.40

Multiple Choice

Mr. Jones and Mr. Smith both plan to retire in 5 years. Mr. Jones has invested $250 per month in a 401K retirement account for 20 years, and Mr. Smith has invested $500 a month in a 401K retirement account for 10 years. Mr. Jones and Mr. Smith invested in the same accounts yielding the same interest rate. Which statement about the retirement investments of Mr. Jones and Mr. Smith is most likely to be true?

• Mr. Smith will most likely have more money in his retirement account because he invested more money each month

• Mr. Jones and Mr. Smith will have the same amount of money in their retirement accounts

• Mr. Jones will most likely have more money in his retirement account because he

  invested regularly over a longer period of time.

• It is impossible to determine whether Mr. Jones or Mr. Smith will have more money

  in their retirement accounts.

Simple Interest vs Compound Interest

• Simple Interest: I=Prt *Solves for interest

• To calculate Total, you must ADD the PRINCIPAL

• Compound Interest: A=P(r + 1)^t *Solves for total amount in account

• To calculate Interest, you must SUBTRACT the PRINCIPAL

Simple vs Compound Interest

Watch the video.

Multiple Choice

Jerry borrowed $4,000 for 5 years at 6% simple interest rate. How much interest is that?

• $800
• $1,000
• $1,200
• $1,500

Multiple Choice

The rate is given as a percent (%).  Before using it in the simple interest formula, you must first convert it to a______.

• fraction
• decimal
• ratio
• dollar amount

Multiple Choice

The simple interest formula is I=Prt.  The P represents the principle.  The principle is ___________________.  

• the amount of money borrowed or deposited
• the percent interest for his year
• the amount taxed
• the amount the bank owes you for being a customer at their bank

Multiple Choice

Principal = $500

Interest rate =5%

Time = 5 years

What is the interest earned?

• 95
• 105
• 125
• 135

Multiple Choice

Emilio borrows $1200 from a bank with 8% simple interest per year.  

How much will he have to pay back total in 2 years?

• $150
• $192
• $1350
• $1392

Multiple Choice

You deposit $2,500 in a savings account.

What is the difference in the amount of interest that will be paid in each situation?

Option A) Interest rate of 8.25% simple interest for 2 years

Option B) Interest rate of 6.5% compounded annually for 2 years

• $769.40

• $335.56

• $76.94

• $68.52

Multiple Choice

You invested $1,900 at 4% interest compounded annually for 3 years. 

How much interest did you earn in 3 years?

• $2,372.40
• $237.24
• $2,137.24
• $3,197.60

Multiple Choice

Your $440 gets 5.8% interest compounded annually for 8 years.

What will your $440 be worth in 8 years?

• $250.78

• $690.78

• $1,130

• $940.78

Multiple Choice

You borrowed $59,000 for 2 years at 11% which was compounded annually. 

What total will you pay back?

• $13,693.90
• $1,363.90
• $72,693.90
• $73,793.90

Multiple Choice

Damon’s father started a college fund on Damon’s 8th birthday.

He deposited $7,500 into a CD (certificate of deposit) that yields an interest rate of 0.23% compounded annually.

How much money will the CD be worth when Damon turns 18 years old?

• $7,672.50

• $7,816.65

• $9,414.94

• $7,674.30

Cost of College 8.12G

Estimate the cost of a 2-year and 4-year college by devising a savings plan

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​Watch this video and take some notes.

Multiple Choice

It will cost Ben $6,600 per year in expenses to attend a two-year community college.

Ben qualifies for a total of $1,500 in scholarships and grants per year, and he will earn $1,750 each year through the work-study program. Ben's estimated cost per year will be $3,350.

Ben's family will cover 25% of his college expenses each year. How much will Ben need to contribute each year?

• $6,700

• $2,512.50

• $837.50

• $1,650

Multiple Choice

Haley is planning for college and knows she wants to graduate from a well-known four-year in-state university. She knows that tuition is expensive, so she wants to compare the cost of attending her first 2 years at the local two-year community college while living with her parents and finishing her last two-years at the four-year university with the cost of attending all four years at the university.

Using the information in the table, find the difference between the costs of attending all four years at a four-year university and the cost of attending 2 years at a two-year college and 2 years at a four-year university.

• $14,970

• $29,940

• $59,880

• $69,840

Multiple Choice

The table below shows the current expenses for attending a university. Which of the following is closest to the cost of attending
this university your first year of college?

• $19,349.00
• $19,420.78
• $17,941.80
• $17,590.00

Multiple Choice

The table below shows the cost of attending a state college. Zyda will receive a scholarship for $2,008 and a grant for $3,500. Her family will contribute $1,900. Zyda plans to take out a loan for the remaining amount she must pay for her first year of college. Which of the following is closest to the amount of the loan?

• $6,461
• $11,456
• $13,919
• $18,914

Multiple Choice

Tuition for one year of college at a state university is about $13,000.

Clay will save money each month for the next four years.

Clay’s parents will give him $5,200 for his first year of tuition.

Which plan shows the minimum amount of money Clay must save to have enough to pay for his first year of tuition?

• Save $270.83 per month for the next 4 years

• Save $162.50 per month for the next 4 years

• Save $650.00 per month for the next 4 years

• Save $108.33 per month for the next 4 years

Poll

After working through this Quizizz, please identify which topic(s) you feel confident solving:

• Loan Length

• Simple Interest

• Compound Interest

• Cost of College