8.4 & 8.5 Review

A repayment schedule shows the distribution of interest and other charges over the life of a loan. It usually does not show the principal.

• True

• False

One reason you might want to make the final payment of your loan before the end of the term is so that you will pay less interest.

• True

• False

Chico Alvarez obtained a loan of $2,400 to install a new roof on his home. The interest rate is 12% and the monthly payment is $113.04. What is the interest on the first monthly payment?

• $24.00

• $25.04

• $29.90

• $32.01

Camryn Mason obtained a $1,200 loan for her scuba diving lessons. She borrowed the money for 6 months at 7% interest. Her monthly payment is $204.10. What is the interest for the second payment?

• $3.53

• $4.69

• $5.85

• $7.00

Camryn Mason obtained a $1,200 loan for her scuba diving lessons. She borrowed the money for 6 months at 7% interest. Her monthly payment is $204.10. What is the balance of her loan after three payments?

• $199.41

• $404.67

• $605.24

• $804.65

Brad Clark took out a simple interest loan at 13% interest for 12 months. His previous balance is $619. What is the final payment if the loan is paid off with the next payment?

• $621.00

• $625.71

• $634.00

• $675.09

Marc Maxwell took out a simple interest loan at 13% interest for 12 months. His previous balance is $2,681.04. What is the final payment if the loan is paid off with the next payment?

• $2,710.08

• $2,801.01

• $2,876.91

• $2,998.01

Chloe Closson paid for her vacation to the mountains with a $3,000 installment loan at 10% for 12 months. Her monthly payments were $263.75. After 5 payments, the balance due was $1,786.20. If Chloe pays off the loan with the sixth payment, how much will she save?

• $45.17

• $135.67

• $213.85

• $308.95

Dan Williams took out a simple interest loan at 14.5% interest for 12 months. His previous balance is $119.42. What is the final payment if the loan is paid off with the next payment?

• $98.74

• $120.86

• $132.90

• $151.23

Roper Fox took out a simple interest loan at 5% interest for 12 months. His previous balance is $200. What is his final payment if the loan is paid off with the next payment?

• $200.31

• $200.56

• $200.72

• $200.83