Review 8-1 to 8-3

What is the maturity value of a loan?

• The amount due if you don't pay off the loan.
• The amount you borrow with a loan.
• The amount you pay when the loan is due.

How do you calculate ordinary interest?

• The time of the loan based on a 365 day year.
• The time of the loan is based on a 360 day year.

Calculate the ordinary interest owed and maturity value for this single payment loan: $6,425 at 7 percent for 180 days.

• Interest $244.89  Maturity Value $6,669.88
• Interest $224.88  Maturity  Value $6,649.88
• Interest $242.89  Maturity Value $6,649.88

Calculate the exact interest owed and maturity value for this single payment loan: $7,200 at 12 percent for 91 days.

• Interest $215.41  Maturity Value $7,417.41
• Interest $215.41  Maturity Value $7,415.41
• Interest $217.41  Maturity Value $7,417.41

You buy a $19,000 car. You pay 25% down and borrow the rest at an APR of 8 percent for 36 months.  What is the down payment amount?

• $4,450
• $7,450
• $4,750
• $7,750

You purchase a $19,000 car, you pay 25% down and borrow the rest at an APR of 8 percent for 36 months.  What will be your monthly payment?

• $446.03

• $746.05

• $466.03

• $766.03

You purchase a $19,000 car, you pay 25% down and borrow the rest at an APR of 8 percent for 36 months.  What will be your total finance charge?

• $1,980.90

• $1,808.60

• $1,806.90

You get an installment loan for $3,200 at an APR of 10% for 12 months.  What is the finance charge?

• $179.36
• $175.36
• $171.36

You can pay back a $12,000 loan with an APR of 12 % for 48 months OR you can shorten repayment term to 24 months.  How much interest will you save if you pay the loan back in 24 months?

• $1,784

• $1,785

• $1,584

• $1,588

The _______ is the portion of the cash price that is owed on an item after making the down payment. 

• down payment 
• amount financed 
• final payment 
• installment loan