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Chapter 8: Problem 49
An exercise machine with an original price of \(\$ 860\) is on sale at \(12 \%\) off. a. What is the discount amount? b. What is the exercise machine's sale price?
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Suppose that you are thinking about buying a car and have narrowed down your choices to two options: The new-car option: The new car costs \(\$ 28,000\) and can be financed with a four-year loan at \(6.12 \%\). The used-car option: A three-year old model of the same car costs \(\$ 16,000\) and can be financed with a four-year loan at \(6.86 \%\). What is the difference in monthly payments between financing the new car and financing the used car?
Describe why a buyer would select a 30 -year fixed-rate mortgage instead of a 15 -year fixed-rate mortage if interest rates are \(\frac{1}{4} \%\) to \(\frac{1}{2} \%\) lower on a 15 -year mortgage.
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?
Student Loans Group members should present a report on federal loans to finance college costs, including Stafford loans, Perkins loans, and PLUS loans. Also include a discussion of grants that do not have to be repaid, such as Pell Grants and National Merit Scholarships. Refer to Funding Education Beyond High School, published by the Department of Education and available at studentaid.ed.gov. Use the loan repayment formula that we applied to car loans to determine regular payments and interest on some of the loan options presented in your report.
In Exercises 11-18, a. Determine the periodic deposit. Round up to the nearest dollar. b. How much of the financial goal comes from deposits and how much comes from interest? $$ \begin{array}{|l|l|l|l|} \hline \$ ? \text { at the end of each year } & 5 \% \text { compounded annually } & 18 \text { years } & \$ 150,000 \\ \hline \end{array} $$
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