Deck 11: Consumer Credit and Mortgages

Question 1

Luigi has a charge card at Willis' Auto Supplies with an APR of 15%. Luigi wants to calculate the finance charges on a previous balance of $319.67. Which statement is true?

A) He should multiply $319.67 by 0.015.
B) He should multiply $319.67 by 0.015 ÷12.
C) He should multiply $319.67 by 0.15.
D) He should multiply $319.67 by 15 ÷12.

Answer 1

D

Question 2

A sporting goods store offers a treadmill for $100 down and $78.50 a month for 30 months. What is the installment price?

Answer 2

$2455;

Question 3

Mica bought a grandfather clock on installment with a down payment of $150 and 18 payments of $46.87. What is the installment price?

A) $693.66
B) $843.66
C) $993.66
D) $1,143.66

Answer 3

C

Question 4

Why is Excel an efficient tool to use for calculation intensive applications such as creating an amortization schedule for a mortgage?

A) Formulas can be entered once and quickly copied to multiple cells.
B) Once a spreadsheet is created it can be used as a template for different loan amounts.
C) A large number of cells can be formatted at once for easy readability.
D) All of the above

Question 5

Becky bought a big screen TV on installment in 24 months and paid off the loan 4 months early. If Becky agreed to pay $210 in finance charges, what is the interest refund?

A) $70.00
B) $36.20
C) $25.20
D) $7.00

Question 6

Tony Lyons bought a new furnace for his house on installment with a $200 down payment. The installment price of the furnace is $4,050. If Tony paid 30 equal installments, how much was each payment?

Question 7

What is the refund fraction on a 48-month loan paid off in 32 months?

A) $\frac{68}{147}$
B) $\frac{17}{147}$
C) $\frac{32}{48}$
D) $\frac{16}{48}$

Question 8

Winnie Polk can buy a car for $10,250. The dealer will give her $1,500 for her old car if she uses their financing option, and she can finance the rest with 36 monthly payments of $275. Winnie could also borrow the money from a bank for a total cost of $576.50. How much would Winnie save by borrowing from the bank instead of financing through the dealer?

Question 9

Mr. Sanchez bought a tool set for 12 monthly payments of $45.78 each and a total finance charge of $62.89 He paid the tool set off 4 months early. What is the final payment?

A) $222.53
B) $243.50
C) $251.56
D) $377.34

Question 10

Kaylah has a charge card with a monthly rate of 1.7% on amounts up to $1,000 and 1.1% on amounts over $1,000. Kaylah's previous balance was $1,406.35. She made a payment of $250, charged $113.48, and was issued a credit for $129.63. Using the previous balance method, what is her new balance?

A) $1,920.93
B) $1,420.93
C) $1,307.45
D) $1,170.93

Question 11

Ping is going to purchase a truck on installment. His down payment is $1,300 with 48 payments of $290. The truck is priced at $12,990. What is the finance charge?

Question 12

On May 1, the unpaid balance on a credit card is $132. During the month, purchases of $16.95, $82.64, and $5.35 are made. Using the previous balance method, what is the unpaid balance on June 1, if the finance charge is 1.9% of the unpaid balance and a payment of $90 is made May 12?

A) $114.57
B) $149.43
C) $171.84
D) $329.43

Question 13

On the 1st of the month, beginning balance of Jacob's charge account is $298.50. A payment of $20 was made on the 15th of the month. It is a 30-day billing cycle. A charge of $45 was made on the 25th of the month. What is the average daily balance?

Question 14

Fay and James purchased a living room set on installment with a $325 down payment and an installment price of $3,257. If Fay and James paid 36 equal installments, how much was each payment?

A) $90.47
B) $81.44
C) $77.49
D) $73.47

Question 15

The APR for Renee's charge account at Super Mart is 21%. Using the previous balance method, what are the finance charges on Renee's previous balance of $645.32?

A) $11.29
B) $13.55
C) $111.29
D) $135.52

Question 16

Paul Hare had a previous balance of $216.54 on his clothing store credit card. He made purchases of $32.10 and a payment of $100. The interest charge was 2.1%. What is the new unpaid balance of Paul's credit card using the previous balance method?

A) $353.19
B) $279.89
C) $194.02
D) $153.19

Question 17

Hal Jacobsen purchased a lawn mower priced at $340 on an installment plan. Hal put 10% down and will pay the remaining balance in 12 monthly payments of $36 each. How much is Hal paying in finance charges?

A) $34
B) $92
C) $126
D) $138

Question 18

On the 1st of the month, the beginning balance on Ashley's charge account was $1,299.34. A payment of $119 was made on the 14th of the month. Purchases of $67.50 were made on the 21st of the month. The charge account has a 31-day billing cycle with a monthly rate of 1.6%. Using the average daily balance method, what is the new balance?

Question 19

Nina Jessup has an unpaid balance of $265 on her credit card with an interest rate of 1.8%. What is the interest charged on the account for the month?

Question 20

Saheel has a charge card with a monthly rate of 1.4% on amounts up to $1,000 and 0.9% on amounts over $1,000. Saheel's previous balance was $1,421.51. He made a payment of $175, charged $423.89, and was issued a credit for $14.90. Using the previous balance method, what is his new balance?

Question 21

Mini is financing an organ with a purchase price of $5,289. She plans to put 15% down and pay the rest in installments. How much will her down payment be?

Question 22

The installment price is the total of the installments plus the _____________.

Question 23

Mrs. Wong bought a diamond necklace for 18 monthly payments of $88 each and a total finance charge of $164. She paid the necklace off 3 months early. What is the payoff amount?

Question 24

The APR for Luke's charge account at Bernie's Hardware Store is 15.6%. Using the previous balance method, what are the finance charges on a previous balance of $388.46?

Question 25

In the refund fraction, the numerator is the sum of the digits of the _________ and the denominator is the sum of the digits of the __________.

Question 26

Jacob is using Excel to track the installment loan he used to buy a new boat. He has entered the purchase price in Cell B5, the interest rate in Cell B6, the down payment percent in Cell B7, and the years for the loan in Cell B8. Formulas will be entered to calculate amount financed in Cell B9, finance charge in Cell B10, and monthly payment in Cell B11.
What should the formula be to calculate the amount Jacob will need to finance?

Question 27

Greta is going to buy a home entertainment center on installment with a down payment of $450 and 24 payments of $155. What is the installment price?

Question 28

On January 1, the previous balance for Donna Small's charge account was $342.23. On the following days, she made the following purchases: January 12, $23.90 and January 20, $99.56. On January 15, Donna made a $60 payment. Using the average daily balance method, find the finance charge and unpaid balance on February 1 if the interest is 1.5% per month.

Question 29

Ken's charge account has an APR of 18% and is on a 31-day billing cycle. On the 1st of the month, the beginning balance on Ken's charge account was $713.49. A payment of $87 was made on the 13th of the month. Purchases of $12.78 were made on the 23rd of the month. Using the average daily balance method, what is the new balance?

Question 30

Gloria has a charge account at Taylor's Department Store with a current balance of $458.76. The finance charge is 1.5% on the unpaid balance. If Gloria makes a payment of $20 and additional purchases amounting to $35, what will be the amount of the ending balance?

Question 31

The APR on a charge account is 13.8%. What is the monthly rate?

Question 32

A small business owner is going to use Excel to track finance charges for customers using credit. When she is setting up her spreadsheet, she will need to enter the previous balance, annual interest rate, and payments made. What three items will she need to calculate in Excel?

Question 33

A washer and dryer were purchased for 12 monthly payments of $147.50 each and a total finance charge of $395. How much is the interest refund after 8 payments? What is the payoff amount?

Question 34

What is the refund fraction on a 12-month loan paid off with 2 months remaining?

Question 35

Tyrone Brown is going to purchase a car on installment. His down payment is $1,575 with 36 payments of $327.80. The truck is priced at $12,000. What is the finance charge?

Question 36

Aja has a charge card with a monthly rate of 1.5% on amounts up to $1,200 and 1% on amounts over $1,200. Her previous balance was $2,237.89. She made a payment of $210, and purchases of $164.25. Using the previous balance method, what is her new balance?

Question 37

Nancy purchased a Hawaiian vacation that she is paying off in installments. If she put $350 down and pays $115 a month for 9 months, what is the installment price?

Question 38

A ski boat was purchased for 36 monthly payments of $135 each and a total finance charge of $349. How much is the interest refund after 12 payments? What is the payoff amount?

Question 39

Jacob is using Excel to track the installment loan he used to buy a new boat. He has entered the purchase price in Cell B5, the interest rate in Cell B6, the down payment percent in Cell B7, and the years for the loan in Cell B8. Formulas will be entered to calculate amount financed in Cell B9, finance charge in Cell B10, and monthly payment in Cell B11.
Jacob needs help to write the formula to determine the monthly payment. How would you explain to Jacob what he needs to calculate so that explanation can turn into an Excel formula? What is the formula?