1. Slide 11 - 1 Copyright © 2009 Pearson Education, Inc. AND Active Learning Lecture Slides For use with Classroom Response Systems Chapter 11 Consumer Mathematics

2. Slide 11 - 2 Copyright © 2009 Pearson Education, Inc. Find the missing quantity by using the simple interest formula. i = ?, p = $5200, r = 6.5% per year, t = 6 months a.$16.90 b.$169.00 c.$1690.00 d.$2028.00

3. Slide 11 - 3 Copyright © 2009 Pearson Education, Inc. Find the missing quantity by using the simple interest formula. i = ?, p = $5200, r = 6.5% per year, t = 6 months a.$16.90 b.$169.00 c.$1690.00 d.$2028.00

4. Slide 11 - 4 Copyright © 2009 Pearson Education, Inc. Find the missing quantity by using the simple interest formula. i = $720, p = $3000, r = 6% per year, t = ? a.0.04 years b.0.4 years c.4 years d.40 years

5. Slide 11 - 5 Copyright © 2009 Pearson Education, Inc. Find the missing quantity by using the simple interest formula. i = $720, p = $3000, r = 6% per year, t = ? a.0.04 years b.0.4 years c.4 years d.40 years

6. Slide 11 - 6 Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. How much interest did she pay for the use of the money? a.$617.40 b.$61.74 c.$6174.00 d.$7408.80

7. Slide 11 - 7 Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. How much interest did she pay for the use of the money? a.$617.40 b.$61.74 c.$6174.00 d.$7408.80

8. Slide 11 - 8 Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. What is the amount she repaid to the bank on the due date of the loan? a.$6300.00 b.$6361.74 c.$6379.14 d.$6917.40

9. Slide 11 - 9 Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. What is the amount she repaid to the bank on the due date of the loan? a.$6300.00 b.$6361.74 c.$6379.14 d.$6917.40

10. Slide 11 - 10 Copyright © 2009 Pearson Education, Inc. Kyle received a loan of $2500 with interest at a 4.5% for 90 days on July 1. Kyle made a payment of $900 on August 10. How much did he owe the bank on the date of maturity? a.$2612.50 b.$1712.50 c.$1622.58 d.$2522.58

11. Slide 11 - 11 Copyright © 2009 Pearson Education, Inc. Kyle received a loan of $2500 with interest at a 4.5% for 90 days on July 1. Kyle made a payment of $900 on August 10. How much did he owe the bank on the date of maturity? a.$2612.50 b.$1712.50 c.$1622.58 d.$2522.58

12. Slide 11 - 12 Copyright © 2009 Pearson Education, Inc. Kyle received a loan of $2500 with interest at a 4.5% for 90 days on July 1. Kyle made a payment of $900 on August 10. What total amount of interest did he pay on the loan? a.$1125.00 b.$112.50 c.$22.58 d.$2.26

13. Slide 11 - 13 Copyright © 2009 Pearson Education, Inc. Kyle received a loan of $2500 with interest at a 4.5% for 90 days on July 1. Kyle made a payment of $900 on August 10. What total amount of interest did he pay on the loan? a.$1125.00 b.$112.50 c.$22.58 d.$2.26

14. Slide 11 - 14 Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $7500, Time: 5 years, Rate: 2.8%, Compounded: Quarterly a.$8622.85 b.$7766.20 c.$8610.47 d.$13,029.37

15. Slide 11 - 15 Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $7500, Time: 5 years, Rate: 2.8%, Compounded: Quarterly a.$8622.85 b.$7766.20 c.$8610.47 d.$13,029.37

16. Slide 11 - 16 Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $5000, Time: 2 years, Rate: 8%, Compounded: Monthly a.$31,705.90 b.$12,590.85 c.$5066.89 d.$5864.44

17. Slide 11 - 17 Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $5000, Time: 2 years, Rate: 8%, Compounded: Monthly a.$31,705.90 b.$12,590.85 c.$5066.89 d.$5864.44

18. Slide 11 - 18 Copyright © 2009 Pearson Education, Inc. A new stove sells for $3250. To finance it through a bank, the bank will require a down payment of 20% and monthly payments of $150 for 18 months. How much money will the purchaser have to borrow from the bank? a.$2700 b.$2600 c.$2500 d.$650

19. Slide 11 - 19 Copyright © 2009 Pearson Education, Inc. A new stove sells for $3250. To finance it through a bank, the bank will require a down payment of 20% and monthly payments of $150 for 18 months. How much money will the purchaser have to borrow from the bank? a.$2700 b.$2600 c.$2500 d.$650

20. Slide 11 - 20 Copyright © 2009 Pearson Education, Inc. A new stove sells for $3250. To finance it through a bank, the bank will require a down payment of 20% and monthly payments of $150 for 18 months. What finance charge will the purchaser have to pay the bank? a.$100 b.$200 c.$300 d.$550

21. Slide 11 - 21 Copyright © 2009 Pearson Education, Inc. A new stove sells for $3250. To finance it through a bank, the bank will require a down payment of 20% and monthly payments of $150 for 18 months. What finance charge will the purchaser have to pay the bank? a.$100 b.$200 c.$300 d.$550

22. Slide 11 - 22 Copyright © 2009 Pearson Education, Inc. A new stove sells for $3250. To finance it through a bank, the bank will require a down payment of 20% and monthly payments of $150 for 18 months. What is the APR? a.4.0% b.4.5% c.5.0% d.5.5%

23. Slide 11 - 23 Copyright © 2009 Pearson Education, Inc. A new stove sells for $3250. To finance it through a bank, the bank will require a down payment of 20% and monthly payments of $150 for 18 months. What is the APR? a.4.0% b.4.5% c.5.0% d.5.5%

24. Slide 11 - 24 Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $135.00. Instead of making his 12 th payment, Brian decides to pay off the loan. Determine the APR of the installment loan. a.6.0% b.6.5% c.7.0% d.7.5%

25. Slide 11 - 25 Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $135.00. Instead of making his 12 th payment, Brian decides to pay off the loan. Determine the APR of the installment loan. a.6.0% b.6.5% c.7.0% d.7.5%

26. Slide 11 - 26 Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $135.00. Instead of making his 12 th payment, Brian decides to pay off the loan. How much interest will Brain save (actuarial method)? a.$34.87 b.$59.76 c.$63.95 d.$68.13

27. Slide 11 - 27 Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $135.00. Instead of making his 12 th payment, Brian decides to pay off the loan. How much interest will Brain save (actuarial method)? a.$34.87 b.$59.76 c.$63.95 d.$68.13

28. Slide 11 - 28 Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $135.00. Instead of making his 12 th payment, Brian decides to pay off the loan. What is the total amount due to pay off the loan? a.$1691.05 b.$1556.05 c.$1308.95 d.$1826.05

29. Slide 11 - 29 Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $135.00. Instead of making his 12 th payment, Brian decides to pay off the loan. What is the total amount due to pay off the loan? a.$1691.05 b.$1556.05 c.$1308.95 d.$1826.05

30. Slide 11 - 30 Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $840.23 on November 22, the billing date. For the period ending on December 22, she had the following transactions. Nov 29Charge: Groceries$75.27 Dec 1Charge: Gas$24.53 Dec 2Payment$500.00 Dec 15Charge: Gifts$124.56 Determine the finance charge on November 22 by using the unpaid balance method. Assume that the interest rate is 1.5% per month. a.$126.00b.$9.32 c.$12.60d.$1.26

31. Slide 11 - 31 Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $840.23 on November 22, the billing date. For the period ending on December 22, she had the following transactions. Nov 29Charge: Groceries$75.27 Dec 1Charge: Gas$24.53 Dec 2Payment$500.00 Dec 15Charge: Gifts$124.56 Determine the finance charge on November 22 by using the unpaid balance method. Assume that the interest rate is 1.5% per month. a.$126.00b.$9.32 c.$12.60d.$1.26

32. Slide 11 - 32 Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $840.23 on November 22, the billing date. For the period ending on December 22, she had the following transactions. Nov 29Charge: Groceries$75.27 Dec 1Charge: Gas$24.53 Dec 2Payment$500.00 Dec 15Charge: Gifts$124.56 Determine the new account balance on December 22 using the finance charge found in part in the previous problem. a.$577.19b.$564.59 c.$552.66d.$452.63

33. Slide 11 - 33 Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $840.23 on November 22, the billing date. For the period ending on December 22, she had the following transactions. Nov 29Charge: Groceries$75.27 Dec 1Charge: Gas$24.53 Dec 2Payment$500.00 Dec 15Charge: Gifts$124.56 Determine the new account balance on December 22 using the finance charge found in part in the previous problem. a.$577.19b.$564.59 c.$552.66d.$452.63

34. Slide 11 - 34 Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $840.23 on November 22, the billing date. For the period ending on December 22, she had the following transactions. Nov 29Charge: Groceries$75.27 Dec 1Charge: Gas$24.53 Dec 2Payment$500.00 Dec 15Charge: Gifts$124.56 Determine the average daily balance for the period. a.$621.46b.$564.59 c.$552.66d.$452.63

35. Slide 11 - 35 Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $840.23 on November 22, the billing date. For the period ending on December 22, she had the following transactions. Nov 29Charge: Groceries$75.27 Dec 1Charge: Gas$24.53 Dec 2Payment$500.00 Dec 15Charge: Gifts$124.56 Determine the average daily balance for the period. a.$621.46b.$564.59 c.$552.66d.$452.63

36. Slide 11 - 36 Copyright © 2009 Pearson Education, Inc. Ella is buying a new condominium. She has found one that costs $240,000. The taxes on the condominium would be $3500 per year, and the homeowners’ insurance would cost $400 per year. She has applied for a conventional loan from the bank. The bank is requiring a 20% down payment, and the interest rate is 8.5% with 2 points. Ella’s annual income is $87,000. She has more than 10 monthly payments remaining on each of the following: $200 for a car and $250 on a college education loan. The bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners’ insurance that is less than or equal to 28% of their adjusted monthly income.

37. Slide 11 - 37 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments $200 and $250 The bank will approve a loan that has a total monthly mortgage payment of principal, interest, property taxes, and homeowners’ insurance that is less than or equal to 28% of their adjusted monthly income.

38. Slide 11 - 38 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments $200 and $250 What is the required down payment? a.$48,000b.$52,000 c.$56,000 d.$60,000

39. Slide 11 - 39 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments $200 and $250 What is the required down payment? a.$48,000b.$52,000 c.$56,000 d.$60,000

40. Slide 11 - 40 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments $200 and $250 Determine the amount paid for points. a.$4800b.$4200 c.$3840d.$3500

41. Slide 11 - 41 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments $200 and $250 Determine the amount paid for points. a.$4800b.$4200 c.$3840d.$3500

42. Slide 11 - 42 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine 28% of her adjusted monthly income. a.$2320b.$2175 c.$2030d.$1904

43. Slide 11 - 43 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine 28% of her adjusted monthly income. a.$2320b.$2175 c.$2030d.$1904

44. Slide 11 - 44 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine the monthly payments of principal and interest for a 25-year loan. a.$1482.24 b.$1545.60 c.$1476.48d.$1409.28

45. Slide 11 - 45 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine the monthly payments of principal and interest for a 25-year loan. a.$1482.24 b.$1545.60 c.$1476.48d.$1409.28

46. Slide 11 - 46 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine their total monthly payments, including homeowners’ insurance and taxes. a.$1870.60b.$1837.27 c.$1578.93d.$1545.60

47. Slide 11 - 47 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine their total monthly payments, including homeowners’ insurance and taxes. a.$1870.60b.$1837.27 c.$1578.93d.$1545.60

48. Slide 11 - 48 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Does Ella meet the requirements for the mortgage? a.Yesb.No c.Can’t determined.Maybe

49. Slide 11 - 49 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Does Ella meet the requirements for the mortgage? a.Yesb.No c.Can’t determined.Maybe

50. Slide 11 - 50 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine the total cost of the house (excluding homeowners’ insurance & taxes) after 25 years. a.$511,716b.$515,520 c.$463,680d.$467,520

51. Slide 11 - 51 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 Determine the total cost of the house (excluding homeowners’ insurance & taxes) after 25 years. a.$511,716b.$515,520 c.$463,680d.$467,520

52. Slide 11 - 52 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 How much of the total cost is interest, including points? a.$323,520b.$271,680 c.$271,716d.$275,520

53. Slide 11 - 53 Copyright © 2009 Pearson Education, Inc. Condominium costs - $240,000 Taxes - $3500 Homeowners’ insurance cost - $400 per year Bank is requiring a 20% down payment Interest rate is 8.5% with 2 points Ella’s annual income is $87,000 Monthly payments - $200 and $250 How much of the total cost is interest, including points? a.$323,520b.$271,680 c.$271,716d.$275,520

54. Slide 11 - 54 Copyright © 2009 Pearson Education, Inc. To save money for retirement, David invests $550 monthly in an ordinary annuity with 6.5% interest compounded monthly. Determine the accumulated amount in David’s annuity after 25 years. a.$119,740.77 b.$179,110.36 c.$411,860.09 d.$513,398.55

55. Slide 11 - 55 Copyright © 2009 Pearson Education, Inc. To save money for retirement, David invests $550 monthly in an ordinary annuity with 6.5% interest compounded monthly. Determine the accumulated amount in David’s annuity after 25 years. a.$119,740.77 b.$179,110.36 c.$411,860.09 d.$513,398.55

56. Slide 11 - 56 Copyright © 2009 Pearson Education, Inc. Kate would like to save $50,000 in ten years. How much should she invest in a sinking fund with 5% interest compounded monthly to accumulate this amount? a.$321.99 b.$521.99 c.$863.93 d.$3863.93

57. Slide 11 - 57 Copyright © 2009 Pearson Education, Inc. Kate would like to save $50,000 in ten years. How much should she invest in a sinking fund with 5% interest compounded monthly to accumulate this amount? a.$321.99 b.$521.99 c.$863.93 d.$3863.93