7.8 HW Using the TVM Solver to Understand Loans

You are ready to purchase your first home. You are interested in one listed at $120,000. You want to put down a down payment of 20%. How much will the down payment be?

• $24,000

• $2,400

• $2,400,000

• $240

Your home loan of $96,000 is going to be financed for a 30 year mortgage at 5% interest. How much will your monthly payments be?

• $515.35

• $3,410.82

• $4,800

Which of the following is considered a finance charge?

• Interest

• Service Fees

• Late Fees

• Balance Transfer Fees

• All of these.

Jonny has determined that he can spend $1000 a month for his monthly mortgage payment. He has secured a loan at 4.5% APR for 30 years. What price of house should Jonny be looking for?

• $197,361.16

• $28,323.90

• $22,222.22

• $336,698.61

Yolanda is planning to attend college. She needs to borrow $7000 to pay for it. She is able to afford monthly payments of $175. What interest rate will allow her to pay off the loan in 4 years?

• 9.24%

• 660%

• 0.8%

• 9.59%

Stephen has decided he wants to buy a new Ford Mustang. The price is $40,000. If he can get a loan at 4% for 60 months, what would be his monthly payments?

• $736.66

• $146.69

• $1,768.07

• $73.67

Mark wants to buy a Honda Civic for $20,000. He has $3000 to use as a down payment. How much will he need to borrow from the bank?

• $17,000

• $23,000

• $20,000

• $3,000

Mark wants to buy a Honda Civic for $20,000. He has $3000 to use as a down payment. The dealer is willing to finance the rest at 6% for 5 years. How much will his monthly payments be?

• $328.66

• $386.66

• $444.65

• $4669.23

You want to buy a new home listed at $150,000. Your bank requires that you make a down payment of 20%. How much money do you need for the down payment?

• $30,000

• $3,000

• $1,500

• $12,000

What is the purpose of a down payment?

• Lower the total loan amount

• Lower your monthly payments