3.2 Loans

Which variable has the greatest effect on the monthly payment of a purchase?

Cecilia bought a new car. The total amount she needs to borrow is $29,541. She plans to take out a four-year loan at an APR of 6.3%. What is the monthly payment?

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CCSS.HSA.CED.A.1

CCSS.HSA.REI.A.1

CCSS.HSA.REI.B.3

Claire needs to borrow $12,000 from a local bank. She compares the monthly payments for a 5.1% loan for three different periods of time. What is the monthly payment for a one-year loan? A two-year loan? A five-year loan?

• $526.99

• $1,027.84

• $227

• $1,200

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CCSS.HSA.CED.A.1

CCSS.HSA.REI.A.1

CCSS.HSA.REI.B.3

CCSS.HSA.SSE.A.1

The Star Pawnshop will lend up to 45% of the value of a borrower’s collateral. Ryan wants to use $4,000 worth of jewelry as collateral for a loan. What is the maximum amount that he could borrow from Star?

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CCSS.HSA.CED.A.1

CCSS.HSA.REI.B.3

CCSS.HSA.SSE.A.1

This scenario will be used for the next 4 questions. Jeanne has a $14,800, 3.5 -year loan with a high APR of 8.56% due to her less-than-average credit rating. What is the monthly payment for this loan?

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CCSS.HSA.CED.A.1

CCSS.HSA.REI.A.2

CCSS.HSA.REI.B.3

CCSS.HSA.SSE.A.1

CCSS.HSF.BF.A.1

CCSS.HSN.Q.A.1

Jeanne has a $14,800, 3.5 -year loan with a high APR of 8.56% due to her less-than-average credit rating. If she changes the loan to a three-year loan, what is the monthly payment?

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CCSS.HSA.CED.A.1

CCSS.HSA.REI.A.2

CCSS.HSA.REI.B.3

CCSS.HSF.BF.A.1

CCSS.HSN.Q.A.1

Jeanne has a $14,800, 3.5 -year loan with a high APR of 8.56% due to her less-than-average credit rating. What is the difference in the monthly payments for the two loans?

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CCSS.HSA.CED.A.1

CCSS.HSA.CED.A.4

CCSS.HSA.REI.B.3

Jeanne has a $14,800, 3.5 -year loan with a high APR of 8.56% due to her less-than-average credit rating. Which loan has the higher finance charge? What is the difference in the finance charge for these two loans?

• 3 year loan

• 3.5 year loan

• $58.56

• $346.14

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CCSS.HSA.CED.A.1

CCSS.HSN.Q.A.1

Jeanne has a $14,800, 3.5 -year loan with a high APR of 8.56% due to her less-than-average credit rating. Do you feel that it is worth paying the higher monthly payment to have the loan finish six months earlier? Justify your reasoning.

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CCSS.HSA.CED.A.1

CCSS.HSA.CED.A.2

CCSS.HSA.REI.B.3

CCSS.HSA.SSE.A.1

CCSS.HSN.Q.A.1

Christina is a police officer, so she can use the Police and Fire Credit Union. The credit union will lend her $11,000 for three years at 4.05% APR. The same loan at her savings banks has an APR of 6.82%. How much would Christina save on the monthly payment if she takes the loan from the credit union and how much would she save in finance charges by taking the loan from the credit union?

• $445.50

• $13.73

• $494.28

• $48.78

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CCSS.HSA.CED.A.1

CCSS.HSA.CED.A.2

CCSS.HSA.CED.A.4

CCSS.HSA.REI.B.3

CCSS.HSA.SSE.A.1