Analysis Assessment #4 Review

Mr. Glynn has an amortized loan payment of $320 and the interest that he owes for that month is $80.

By how much does Mr. Glynn pay down his principal?

(How much of this loan payment goes toward principal?)

• $400

• $320

• $80

• $240

Which of the following are true as the months progress on an amortized loan?

(select all that apply)

• Monthly payments increase

• Monthly payments stay the same

• Principal is paid down faster

• Principal is paid down slower

• Interest payments decrease

Mr. Glynn plans to purchase a new Honda Civic for $24,000 at 5% APR.

For which financing option will he end up paying the MOST interest?

(you shouldn't have to do any calculations here)

• 48-month term &

  $2,000 downpayment

• 24-month term &

  $2,000 downpayment

• 48-month term &

  $1,500 downpayment

• 24-month term &

  $3,000 downpayment

Mr. Glynn plans to purchase a new Honda Civic for $24,000 at 5% APR.

For which financing option will he end up paying the LEAST interest?

(you shouldn't have to do any calculations here)

• 48-month term &

  $2,000 downpayment

• 24-month term &

  $2,000 downpayment

• 48-month term &

  $1,500 downpayment

• 24-month term &

  $3,000 downpayment

What is the relationship between compounding frequency and total interest?

• The more frequently interest compounds, the more total interest there will be.

• The more frequently interest compounds, the less total interest there will be.

• There is no relationship between compounding frequency and total intererest.

Which compounding frequency will yield the most total interest?

• compounding monthly

• compounding daily

• compounding semiannualy

• compounding annually

Mr. Glynn deposits $1000 into a savings account with an APR of 2.75% compounded monthly.

He wants to find out how much money will be in the account after 10 years if he doesn't make any additional deposits or withdrawals.

Which is the correct formula for his calculations?

If Mr. Glynn takes out a $25,000 loan and makes 4 years worth of $625 monthly payments to pay it off...

What is the total amount that he will pay over the course of the loan?

• $30,000

• $5,000

• $25,000

• $6,000

If Mr. Glynn takes out a $25,000 loan and makes 4 years worth of $625 monthly payments to pay it off...

What is the total amount of interest that he will pay over the course of the loan?

• $30,000

• $5,000

• $25,000

• $6,000

Which of the following are true in general if you decrease your monthly payment on a loan?

(circle all that apply)

• You will pay more total interest

• It will take longer to pay off the loan

• You will save money in the long-term

• You will pay less total interest