Slide Copyright © 2009 Pearson Education, Inc. AND Active Learning Lecture Slides For use with Classroom Response Systems Chapter 11 Consumer Mathematics
Slide 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.$16.90 b.$ c.$ d.$
Slide 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.$16.90 b.$ c.$ d.$
Slide 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
Slide 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
Slide Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. How much interest did she pay for the use of the money? a.$ b.$61.74 c.$ d.$
Slide Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. How much interest did she pay for the use of the money? a.$ b.$61.74 c.$ d.$
Slide Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. What is the amount she repaid to the bank on the due date of the loan? a.$ b.$ c.$ d.$
Slide Copyright © 2009 Pearson Education, Inc. Ella borrowed $6300 from a bank for 24 months at a rate of 4.9% simple interest. What is the amount she repaid to the bank on the due date of the loan? a.$ b.$ c.$ d.$
Slide 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 $900 on August 10. How much did he owe the bank on the date of maturity? a.$ b.$ c.$ d.$
Slide 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 $900 on August 10. How much did he owe the bank on the date of maturity? a.$ b.$ c.$ d.$
Slide 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 $900 on August 10. What total amount of interest did he pay on the loan? a.$ b.$ c.$22.58 d.$2.26
Slide 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 $900 on August 10. What total amount of interest did he pay on the loan? a.$ b.$ c.$22.58 d.$2.26
Slide Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $7500, Time: 5 years, Rate: 2.8%, Compounded: Quarterly a.$ b.$ c.$ d.$13,029.37
Slide Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $7500, Time: 5 years, Rate: 2.8%, Compounded: Quarterly a.$ b.$ c.$ d.$13,029.37
Slide Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $5000, Time: 2 years, Rate: 8%, Compounded: Monthly a.$31, b.$12, c.$ d.$
Slide Copyright © 2009 Pearson Education, Inc. Compute the total amount: Principal: $5000, Time: 2 years, Rate: 8%, Compounded: Monthly a.$31, b.$12, c.$ d.$
Slide 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
Slide 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
Slide 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
Slide 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
Slide 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%
Slide 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%
Slide Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $ 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%
Slide Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $ 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%
Slide Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $ 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
Slide Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $ 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
Slide Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $ 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.$ b.$ c.$ d.$
Slide Copyright © 2009 Pearson Education, Inc. Brian borrowed $3000. To repay the loan, he was scheduled to make 24 monthly installment payments of $ 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.$ b.$ c.$ d.$
Slide Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $ 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$24.53 Dec 2Payment$ Dec 15Charge: Gifts$ 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
Slide Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $ 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$24.53 Dec 2Payment$ Dec 15Charge: Gifts$ 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
Slide Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $ 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$24.53 Dec 2Payment$ Dec 15Charge: Gifts$ Determine the new account balance on December 22 using the finance charge found in part in the previous problem. a.$577.19b.$ c.$552.66d.$452.63
Slide Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $ 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$24.53 Dec 2Payment$ Dec 15Charge: Gifts$ Determine the new account balance on December 22 using the finance charge found in part in the previous problem. a.$577.19b.$ c.$552.66d.$452.63
Slide Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $ 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$24.53 Dec 2Payment$ Dec 15Charge: Gifts$ Determine the average daily balance for the period. a.$621.46b.$ c.$552.66d.$452.63
Slide Copyright © 2009 Pearson Education, Inc. Cailin’s credit card statement shows a balance due of $ 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$24.53 Dec 2Payment$ Dec 15Charge: Gifts$ Determine the average daily balance for the period. a.$621.46b.$ c.$552.66d.$452.63
Slide 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.
Slide 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.
Slide 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
Slide 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
Slide 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
Slide 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
Slide 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
Slide 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
Slide 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 $250 Determine the monthly payments of principal and interest for a 25-year loan. a.$ b.$ c.$ d.$
Slide 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 $250 Determine the monthly payments of principal and interest for a 25-year loan. a.$ b.$ c.$ d.$
Slide 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 $250 Determine their total monthly payments, including homeowners’ insurance and taxes. a.$ b.$ c.$ d.$
Slide 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 $250 Determine their total monthly payments, including homeowners’ insurance and taxes. a.$ b.$ c.$ d.$
Slide 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
Slide 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
Slide 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
Slide 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
Slide 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
Slide 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
Slide 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, b.$179, c.$411, d.$513,398.55
Slide 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, b.$179, c.$411, d.$513,398.55
Slide Copyright © 2009 Pearson Education, Inc. Kate would like to save $50,000 in ten years. How much should she invest in a sinking fund with 5% interest compounded monthly to accumulate this amount? a.$ b.$ c.$ d.$
Slide Copyright © 2009 Pearson Education, Inc. Kate would like to save $50,000 in ten years. How much should she invest in a sinking fund with 5% interest compounded monthly to accumulate this amount? a.$ b.$ c.$ d.$