Solving Real-World Problems with Interest Rates and Loan Lengths

Aiden took a loan from the bank to buy a car. The amount charged by the bank for lending the money is called?

• term

• credit limit

• interest

• monthly payment

Cost of credit expressed as a yearly percentage 

• Mortgage

• Principal

• APR

• Finance company

Cost of Credit expressed as a yearly percentage

• APY

• APR

• Principal

• Mortgage

$5,000

• $5,000

• $10,000

• $15,000

• None, they will save enough

An eighth grade student estimated that she needs $8,800 for tuition and fees for each year of college. The student wants to have enough money saved in five years to pay for her first two years of college. Based on the table, what is the minimum amount she should deposit in the savings account every month?

• $200

• $300

• $100

• $400

Jane is looking to move the balance from her current card to a new credit card. Her concern is the lowest cost for this type of transaction.

Which credit card is the best choice for Jane?

​ (a)  

• credit card B

• credit card A

Jeanne has a $14,800, 3.5 -year loan with a high APR of 8.56% due to her less-than-average credit rating. Do you feel that it is worth paying the higher monthly payment to have the loan finish six months earlier? Justify your reasoning.

Tags

CCSS.HSA.CED.A.1

CCSS.HSA.REI.B.3

CCSS.HSN.Q.A.1

CCSS.HSA.SSE.A.1

CCSS.HSA.CED.A.2

If I want to pay less in interest, I can....

• Get a longer term

• Get a shorter term

• This is not possible

which of the following does NOT affect your monthly payment for a loan?

• Interest Rate

• Term

• Amount you borrowed

• Sales tax