3.3 Loan Calculations Worksheet

1. What is the monthly payment for a 10-year, $20,000 loan at 4.625% APR? (Use the formula method)

• $347.19

• $192.55

• $272.88

• $208.48

1. What is the monthly payment for a 10-year, $20,000 loan at 4.625% APR? What is the total interest paid on this loan? (Use the formula method)

• $3,655,14

• $4,318.90

• $5,017.60

• $2,962.77

2. Magnus wants to borrow $26,000 to remodel his kitchen. He is hoping that his monthly payment will be no more than $372. The bank is offering a 4.3% loan. What will the length of his loan be if he is able to secure a $372 monthly payment? Round up to the nearest half year.

• 5 years

• 7 years

• 9 years

• 10 years

3. Simon is taking out a 5.1% loan in order to purchase a $17,000 car. The length of the loan is 5 years. How much will he pay in interest? (Use the formula method)

• $2,295.40

• $321.59

• $19,295

• $1,963.28

4. Izzy wants to borrow $12,000 to purchase a used boat. After looking at her monthly budget, she realizes that all she can afford to pay per month is $250. The bank is offering a 6.1% loan. What should the length of her loan be so that she can keep within her budget? Round up to the nearest half year.

• 4 years

• 6 years

• 5 years

• 7 years

5. What is the total interest on a 15-year, 4.98% loan with a principal of $40,000? (Use the formula method)

• $315.90

• $56,862

• $16,862

• $23,117

6. Alec wants to borrow $10,000 from the Hampton County Bank. They offered him a 6-year loan with an APR of 6.35%. How much will he pay in interest over the life of the loan? (Use the formula method)

• $167.39

• $12,052

• $2,052.08

• $1,438.76

7. Jace and Clary want to borrow $35,000 in order to build an addition to their home. Their bank will lend them the money for 12 years at an interest rate of 5.375%. How much will they pay in interest to the bank over the life of the loan? (Use the formula method)

• $12,568.96

• $330.34

• $47,569

• $10,921.15

8. Raphael wants to start up a sunglasses business and needs to borrow $15,000 to start his business. He knows that the bank will give him an interest rate of 8.25%. If Raphael wants to keep his monthly payments at $275, how many years will he need the loan to be for? Round up to the nearest half year.

• About 10 years

• About 2 years

• About 6 years

• About 8 years

9. Jordan and Maia are wanting to purchase a 1969 Camaro to restore. The purchase price of the car is $35,000. The FST Bank will give them a rate of 4.75%. How many years will they need the loan to be for if they can only afford $300 per month? Round up to the nearest half year.

• About 12 years

• About 12.5 years

• About 13 years

• About 13.5 years