6.8 The Basics of Loans
Loan vocabulary and credit scoring, the payment that retires a fixed-term debt, reading an amortization table, and totalling the cost to finance.
3 exercises
6.8 Exercise 1
Find the interest to be paid for the period on loans with the following remaining principal and given annual interest rate. Each period is a month.
- Remaining principal is $13,450, interest rate is 6.75%
- Remaining principal is $8,460, interest rate is 5.99%
6.8 Exercise 3
In the following, calculate the payment necessary to pay off the loan with the given details. The payments are monthly.
- A car loan taken out for $28,500 at an annual interest rate of 3.99% for 5 years.
- A home loan taken out for $136,700 and an annual interest rate of 5.75% for 15 years.
6.8 Exercise 7
Irena signed for a loan of $15,000 at 6.33% for 5 years. When she took out the loan, Irena paid a $750 origination fee. Over the course of the loan, she pays $2,537.96 in interest. What was her cost to finance the loan?
Adapted from Contemporary Mathematics © 2023 Rice University. Licensed under CC BY 4.0. Source: Contemporary Mathematics. Imported at revision fa7c1a1.