loan review

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

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

______ ________ is interest on a loan calculated by basing the time of the loan on a 365-day year

• ordinary interest 
• exact interest
• maturity value 
• installment loan 

A(n) ______ _______ is a loan repaid in equal payments over a specified period of time

• single payment loan 
• installment loan
• maturity value 
• ordinary interest 

A(n) ______ _______ ______ is a loan that has to be repaid with one payment after a specified period of time

• exact interest 
• installment loan 
• annual percentage rate 
• single payment loan

Seth financed a purchase of a used car for $6,750. He has a four-year loan at a 7.125% annual interest rate with monthly payments of $162.03.For his first monthly payment, calculate the amount that was paid in interest.

• $40.00

• $41.00

• $40.80

• $40.08

Ezekiel has a loan that he used for vision correction surgery. He originally borrowed $3,680 at an annual interest rate of 8.45% for three years. Ezekiel’s monthly payments are $286.60.With five remaining payments, his principal balance is $568.35, and he wants to pay the balance of the loan. Calculate an estimate of his early payoff amount.

• $572

• $572.30

• $572.39

• $573.35

Sarah is buying a new couch for $989. She made a down payment of $200 and financed the remainder. What amount did she finance?

• $766

• $789

• $799

• $877

An APR of 5.4% in decimal form is....

• .54

• .054

• 5.4

• .0054