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Interest and Credit Test Review

This document contains 7 multi-part math word problems involving calculating interest, compound interest, monthly loan payments, credit card balances and financing options. The problems require using formulas, tables of interest rates and payment amounts, and performing calculations to determine unknown values like interest earned/owed, new balances, monthly payments and prices under different payment options.

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Jehu Peters
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96 views

Interest and Credit Test Review

This document contains 7 multi-part math word problems involving calculating interest, compound interest, monthly loan payments, credit card balances and financing options. The problems require using formulas, tables of interest rates and payment amounts, and performing calculations to determine unknown values like interest earned/owed, new balances, monthly payments and prices under different payment options.

Uploaded by

Jehu Peters
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Test Review

1. You borrow $4500 from a bank that charges simple interest at 7% per year.
If it takes 6 months to repay the loan, how much interest will you be
charged?

2. Chhey invested $800. 6 years later she had $ 944. How much interest did
she earn?

3. Tom invests $2500 at 4% over 5 years compounded monthly. Determine the


value of the investment.
4. Using the rule of 72, solve the following problems:

1. Roma invests $4000 over 6 years and then had $8000. What was the
interest rate?

2. If Mac invests $2000 at 9%, how long will it take for her to money to
double?

5. Shally has a credit card with an annual interest rate charge of 21.22% and a
monthly limit of $8000. She had a previous balance of $2600 and made
purchases totaling $380. She made a payment of only $1200. Her minimum
monthly payment must be $100 or 5% whichever is greater. Calculate the
following:

a) The monthly interest rate .

2
b) The new interest charge .

c) The new balance

d) The minimum payment required.

e) The credit available.

3
6. Carlee likes to shop. She wants to buy a 48 LED TV with Bose surround-
sound. She found one at Best Buy for $5500. Do you think she has this kind
of money just laying around? I dont think so! She needs a loan. She decides
that she can handle a loan for 2 years. Using the attached tables,
determine:

a) Carlees monthly payments for this loan.

b) The amount of interest Carlee will pay for this loan.

4
Circle any numbers you use from these tables:

Table 1:

Range 1 year 2 years 3 years 4 years 5 years


Less than $5000 12.75% 12.75% - - -
$5000 - $15 000 9.75% 10.00% 10.25% 10.50% 11.00%
$15 000 - $30 9.25% 9.75% 9.75% 10.00% 10.25%
000
Over $30 000 8.50% 8.75 9.25% 9.50% 9.75%
Table 2:

Personal Loan Payment


Monthly Payment per $1000
Annual Interest 1 year 2 years 3 years 4 years 5 years
6.00%
Rate 86.07 44.33 30.43 23.49 19.34
6.25% 86.18 44.44 30.54 23.61 19.46
6.50% 86.30 44.56 30.66 23.72 19.57
6.75% 86.41 44.67 30.77 23.84 19.69
7.00% 86.53 44.78 30.88 23.95 19.81
7.25% 86.64 44.89 31.00 24.07 19.93
7.50% 86.76 45.01 31.11 24.19 20.05
7.75% 86.87 45.12 31.23 24.30 20.16
8.00% 86.99 45.24 31.34 24.42 20.28
8.25% 87.10 45.34 31.45 24.53 20.40
8.50% 87.22 45.46 31.57 24.65 20.52
8.75% 87.34 45.57 31.68 24.71 20.64
9.00% 87.45 45.68 31.80 24.89 20.76
9.25% 87.57 45.80 31.92 25.00 20.88
9.50% 87.68 45.91 32.03 25.12 21.00
9.75% 87.80 46.03 32.15 25.24 21.12
10.00% 87.92 46.14 32.27 25.36 21.25
10.25% 88.03 46.26 32.38 25.48 21.37
10.50% 88.15 46.38 32.50 25.60 21.49
10.75% 88.27 46.49 32.62 25.72 21.62
11.00% 88.38 46.61 32.74 25.85 21.74
11.25% 88.50 46.72 32.86 25.97 21.87
11.50% 88.62 46.84 32.98 26.09 21.99
11.75% 88.73 46.96 33.10 26.21 22.12

5
7. Tom needs to buy new kitchen appliances for $3500 (plus taxes) from Home
depot Warehouse. They are offering the following sweet promotion to
entice customers to shop there:

Option 1 Pay Now: pay full price, plus PST, GST and a delivery charge of
$50 (including taxes)

Option 2 Pay Later: pay taxes, delivery charge of $50 (including taxes), a
$60 admin. fee (plus taxes) and pay the $3500 (plus taxes) one year
from now.

a) Calculate Toms pay-now price.

b) Calculate Toms total pay-later price.

6
c) How much more would he pay if he chooses the pay-later deal?

7
1. $ 157.50

2. 3%

3. $ 3052.49

4. 1. 12%, 2. 8 years

5. a) 1.77%, b) $ 24.78, c) 1804.78, d) $ 100, e) $ 6195.22

6. a) $ 253.77, b) $ 590.48

7. a) $ 4005, b) $ 4072.80, c) $ 67.80

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