Reducing-Balance Loans Review

• $23 626.15

• $23 859.14

• $24 090.51

• $25 887.34

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CCSS.HSF.BF.A.2

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CCSS.HSF.IF.A.3

What is the principal of this loan?

• $97.50

• $500.00

• $12 961.16

• $15 000

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What is the value of A, the reduction in principal by repayment number 3?

• $312.87

• $407.75

• $497.37

• $500.00

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CCSS.HSF.BF.A.2

The interest charged on this loan compounds monthly and monthly repayments are made. The annual percentage rate of interest for this loan is closet to:

• 6.5%

• 6.67%

• 7.8%

• 8.01%

A reducing-balance loan has principal $180 000 and will be repaid with monthly repayments of $1500. The interest rate for this loan is 6.5% per annum, compounding monthly.

Using the annuities formula, the balance of this loan after two years will be:

• $144 000

• $166 583.04

• $167 667.37

• $173 508.88

Mei Hui has borrowed $28 000 and will be charged compound interest at the rate of 6.4% per annum compounding monthly. She will repay this loan with exactly 24 repayments. The monthly repayment amount is closest to:

• $850

• $1046

• $1246

• $2415

A reducing-balance loan with principal $40 000 is repaid with monthly repayments of $550. The annual interest rate is 5.2%. How many repayments does it take to reduce the balance of this loan below $35 000?

• 10

• 11

• 12

• 13

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If the balance of a reducing-balance loan with principal $175 000 has been reduced to $89 573.97 after 35 quarterly repayments of $4218, the annual percentage rate of interest for the loan is closest to:

• 5.2%

• 5.4%

• 5.6%

• 5.8%

A loan of $6000, plus interest, is to be repaid with exactly 12 quarterly repayments. Interest charged at the rate of 10% per annum, compounding quarterly. If the first 11 repayments are of value $580, the 12th and final repayment must be:

• $228.97

• $351.03

• $580.00

• $647.91