Chapter 8 Loans
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9. Divide decimals. Round to the nearest cent ($0.01) if necessary. Example:
$20.62 ÷ 0.2 = $103.10
A. $5.75 ÷ 0.25 = B. $39 ÷ 0.4 =
C. $14.45 ÷ 0.5 = D. $6.27 ÷ 0.3 =
10. Simplify fractions. Example:
16
32
=
1
2
A.
70
140
= B.
16
80
=
C.
15
81
= D.
57
95
=
Section 8.1 Loans and Interest
11. Kathleen received a loan from her bank for $4,085 for a period of one year.
The interest rate is 4.95%. The original loan amount and the interest must be
repaid in full at the end of the year. Determine the amount of interest that
Kathleen will pay.
12. Derek borrowed $2,150 using the exact interest method. He will pay an
annual interest rate of 5.29% and will repay the loan in 58 days. Calculate the
total amount that Derek will pay back when he repays the loan.
Section 8.2 Installment Loans
13. Seth fi nanced a purchase of a used car for $6,750. He has a four-year loan at
a 7.125% annual interest rate with monthly payments of $162.03. For his fi rst
monthly payment, calculate the amount that was paid in interest and the
amount that was applied to the principal balance.
14. Marisol has a loan that she used for vision correction surgery. She originally
borrowed $3,680 at an annual interest rate of 8.45% for three years. Marisol’s
monthly payments are $286.60. With fi ve remaining payments, her principal
balance is $568.35, and she wants to pay the balance of the loan. Calculate
an estimate of Marisol’s early payoff amount.
Section 8.3 High-Interest Loans
15. Fatir is considering a payday loan for $245. The payday lender charges 24.5%
for a brokerage fee, plus 0.43% in interest charges for a 14-day term loan.
How much will Fatir pay back at the end of the 14 days?
16. Neela decided to take her DVD player to a pawnshop because she needed
money. The pawnbroker gave her $63, and they agreed to a contract in
which Neela would need to return the cash in 30 days and pay a 2.4%
interest fee and 22.3% service fee in order to reclaim her DVD player. How
much will Neela pay back if she returns in 30 days to reclaim her DVD player?