91Ó°ÊÓ

Exercises 1-2 involve credit cards that calculate interest using the average daily balance method. The monthly interest rate is \(1.5 \%\) of the average daily balance. Each exercise shows transactions that occurred during the March \(1-\) March 31 billing period. In each exercise, a. Find the average daily balance for the billing period. Round to the nearest cent. b. Find the interest to be paid on April 1, the next billing date. Round to the nearest cent. c. Find the balance due on April 1 . d. This credit card requires a \(\$ 10\) minimum monthly payment if the balance due at the end of the billing period is less than \(\$ 360\). Otherwise, the minimum monthly payment is \(\frac{1}{30}\) of the balance due at the end of the billing period, rounded up to the nearest whole dollar. What is the minimum monthly payment due by April 9 ? $$ \begin{array}{|l|c|} \hline \text { Transaction Description } & \text { Transaction Amount } \\ \hline \text { Previous balance, } \$ 6240.00 & \\ \hline \text { March 1 } \quad \text { Billing date } & \\ \hline \text { March 5 } \quad \text { Payment } & \$ 300 \text { credit } \\ \hline \text { March 7 } \quad \text { Charge: Restaurant } & \$ 40 \\ \hline \text { March 12 } \quad \text { Charge: Groceries } & \$ 90 \\ \hline \text { March 21 } \quad \text { Charge: Car Repairs } & \$ 230 \\ \hline \text { March 31 } \quad \text { End of billing period } & \\ \hline \text { Payment Due Date: April 9 } & \\ \hline \end{array} $$

The price of a home is \(\$ 220,000\). The bank requires a \(20 \%\) down payment and three points at the time of closing. The cost of the home is financed with a 30 -year fixed-rate mortgage at \(7 \%\). a. Find the required down payment. b. Find the amount of the mortgage. c. How much must be paid for the three points at closing? d. Find the monthly payment (excluding escrowed taxes and insurance). e. Find the total cost of interest over 30 years.

In Exercises 1-10, use $$ P M T=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-n t}\right]} $$ Round answers to the nearest dollar. Suppose that you borrow $30,000 for four years at 8% for the purchase of a car. Find the monthly payments and the total interest for the loan.

The price of a condominium is \(\$ 180,000\). The bank requires a \(5 \%\) down payment and one point at the time of closing. The cost of the condominium is financed with a 30 -year fixed-rate mortgage at \(8 \%\). a. Find the required down payment. b. Find the amount of the mortgage. c. How much must be paid for the one point at closing? d. Find the monthly payment (excluding escrowed taxes and insurance). e. Find the total cost of interest over 30 years.

In Exercises 1-10, a. Find the value of each annuity. Round to the nearest dollar b. Find the interest. $$ \begin{array}{l|l|l} \begin{array}{l} \$ 4000 \text { at the end of } \\ \text { each year } \end{array} & \begin{array}{l} 6.5 \% \text { compounded } \\ \text { annually } \end{array} & 40 \text { years } \end{array} $$

In Exercises 1-10, use $$ P M T=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-n t}\right]} $$ Round answers to the nearest dollar. Suppose that you decide to borrow \(\$ 15,000\) for a new car. You can select one of the following loans, each requiring regular monthly payments: Installment Loan A: three-year loan at \(5.1 \%\) Installment Loan B: five-year loan at \(6.4 \%\). a. Find the monthly payments and the total interest for Loan A. b. Find the monthly payments and the total interest for Loan B. c. Compare the monthly payments and the total interest for the two loans.

The price of a small cabin is \(\$ 100,000\). The bank requires a \(5 \%\) down payment. The buyer is offered two mortgage options: 20 -year fixed at \(8 \%\) or 30 -year fixed at \(8 \%\). Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 20-year option?

In Exercises 3-4, find the gross income, the adjusted gross income, and the taxable income. Base the taxable income on the greater of a standard deduction or an itemized deduction. Suppose your neighbor earned wages of \(\$ 86,250\), received \(\$ 1240\) in interest from a savings account, and contributed \(\$ 2200\) to a tax-deferred retirement plan. She is entitled to a personal exemption of \(\$ 3800\) and a standard deduction of \(\$ 5950\). The interest on her home mortgage was \(\$ 8900\), she contributed \(\$ 2400\) to charity, and she paid \(\$ 1725\) in state taxes.

In Exercises 1-10, use $$ P M T=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-n t}\right]} $$ Round answers to the nearest dollar. Suppose that you decide to borrow \(\$ 40,000\) for a new car. You can select one of the following loans, each requiring regular monthly payments: Installment Loan A: three-year loan at \(6.1 \%\) Installment Loan B: five-year loan at \(7.2 \%\). a. Find the monthly payments and the total interest for \(\operatorname{Loan} A\). b. Find the monthly payments and the total interest for Loan B. c. Compare the monthly payments and the total interest for the two loans.

In Exercises 3-4, find the gross income, the adjusted gross income, and the taxable income. Base the taxable income on the greater of a standard deduction or an itemized deduction. Suppose your neighbor earned wages of \(\$ 319,150\), received \(\$ 1790\) in interest from a savings account, and contributed \(\$ 4100\) to a tax-deferred retirement plan. He is entitled to a personal exemption of \(\$ 3800\) and the same exemption for each of his two children. He is also entitled to a standard deduction of \(\$ 5950\). The interest on his home mortgage was \(\$ 51,235\), he contributed \(\$ 74,000\) to charity, and he paid \(\$ 12,760\) in state taxes.