Chapter 8 Loans
280
Check It
Jiang has a car loan. He originally borrowed $5,200 at an annual interest
rate of 6.25% for three years. Jiang’s monthly payments are $158.79. With fi ve
remaining payments, his principal balance is $781.66. He wants to pay the
balance of the loan. Calculate an estimate of Jiang’s early payoff amount.
Checkpoint 8.2
1. Bianca has a car loan with monthly payments of $381.86. She originally
borrowed $16,500 for four years at an annual interest rate of 5.25%. For her
fi rst monthly payment, calculate the amount that was paid in interest and
the amount that was applied to the principal balance.
2. Aaron fi nanced his new motorcycle for $18,250. He has a three-year loan at
a 6.3% annual interest rate. The monthly payments are $557.68. For his fi rst
monthly payment, calculate the amount that was paid in interest and the
amount that was applied to the principal balance.
3. Martina and Luis want to purchase a new recreational vehicle for $29,450.
The bank requires a down payment of 12%. How much will Martina and Luis
need to provide for a down payment? What is the amount they will need to
fi nance?
4. Maiko has a car loan. He originally borrowed $7,850 at an annual interest
rate of 5.45% for three years. Maiko’s monthly payments are $237.86. With
six remaining payments, his principal balance is $1,398.85, and he wants to
pay the balance of the loan. Calculate an estimate of Maiko’s early payoff
amount.
5. Safi a has a truck loan. She originally borrowed $14,950 at an annual interest
rate of 5.65% for fi ve years. Safi a’s monthly payments are $286.60. With nine
remaining payments, her principal balance is $2,519.70. She wants to pay the
balance of the loan. Calculate an estimate of Safi a’s early payoff amount.