Compound Interest Amortization

An amortization payment is made up of what two parts?

• Interest and Principal
• Interest and Payment Amount
• Payment amount and Principal
• Percent and Interest

The fixed payment for a mortgaga is $1297.20.  The original balance is $200,000.  If the interest payment was $1123.06 and the principal payment was $174.14, what is the new balance on the loan?

• $1297.20
• $199,480.50
• $198,876.94
• $1123.06

Tags

CCSS.8.EE.C.7B

If Emme wants to buy a house and can afford to pay $1500/month on his mortgage (which is 30 years fixed at a rate of 3%, compounded monthly), how much can his total mortgage be?

• $853,112.12
• $355,784.07
• $437,002.79
• $225,613.12

If Mr. Bowker has $1,700,000 saved in his annuity and is about to retire at age 63 (and he plans to live to age 90), how much can he withdraw each month, to the nearest hundred dollars, if his interest rate is at 5.5%, compounded monthly?

• $5,200/month
• $7,500/month
• $10,100/month
• $15,100/month

Tags

CCSS.HSF.BF.A.2

gradual payment of a loan,in full,by making regular payments over time of principal and interest so there is a $0 balance at the end of the term.

• amortization
• simple interest
• Rule of 72
• round up account

the amount borrowed (or invested)

• Principal
• amortization
• simple interest
• Rule of 72

The compound interest formula is:

• A = P ( 1 + r/n)^nt
• A = P ( 1 + P/n)^nt
• A = P ( 1 + P/n)^rt
• A = P ( 1 + r/n)^rt

The Booth Family is buying a home for $300,000. The bank is requiring a down payment of 20% of the total cost. They obtain a 30-year mortgage at 4.2% interest rate for the home.What is your down payment amount?

• $60,000
• $12,600
• $6,000
• $1,260

Tags

CCSS.6.RP.A.3C

Determine the monthly amortization payments of the 30 year loan amount of $240,000 at a interest rate of 4.2%.

• $1,173.64
• $670.89
• $333.64
• $10,080

This type of interest "creates a mathematical explosion," and it can make you wealthy over time, or keep you in debt for a long time.

• compound
• sinking
• annual