Loans

Brenda's bank offers car financing for 3, 4 or 5 years. If Brenda chooses 5-year financing, how many monthly payments will she have?

• 60

• 36

• 48

• 12

What would happen to a monthly payment if the interest rate increased?

• The payment would remain the same.

• The payment would go down.

• The payment would go up.

• None of the above.

Marie is planning on attending college when she graduates in 4 years. She is devising a plan to save money each month to help with expenses. The cost for one year is $16,000, her parents promised to pay $10,000 per year. How much should she save up to pay for her first year of tuition?

• Save $333.33 per month for 4 years

• Save $458.33 per month for 4 years

• Save $125 per month for 4 years

• Save $208.33 per month for 4 years

Stef took out a $7,500 loan with an APR of 3.875% and agreed to pay it back monthly for 6 years. How many monthly payments did she make?

• 70

• 72

• 60

• 68

What does the following formula calculate?

I = Prt

• Simple interest

• Annual interest

• Compound interest

• Annuity interest

When you pay back a loan, you not only pay the amount you borrowed, you also pay it back with _____________

• Interest

• Deposit

• Withdrawal

• Checking

Deena wants to buy a $2,200 laptop, but she doesn't have the money. She decides to finance the purchase and will pay monthly payments of $231.55 for a year. How much extra will Deena end up paying for the laptop because she financed it rather than paying for it all at once?

• $2,778.60

• $1,621.40

• $578.60

• $463.10

The principal of a loan is

• Dr. Slaba

• The total amount paid when the loan is paid off

• The amount of money loaned before any fees or interest

• The percentage of the loan that must be paid to the lender in addition to the loan amount.

A person owes $10,000 on a loan with a 20% interest rate and $200 monthly payments over 108 months. What is the interest rate on this loan?

• $200

• $10,000

• 108 months

• 20%

A person owes $10,000 on a loan with a 20% interest rate and $200 monthly payments over 108 months. What is the term on this loan?

• $200

• $10,000

• 9 years

• 20%