M3 Finance Worksheet (2)

.docx

School

Kennesaw State University *

*We aren’t endorsed by this school

Course

101

Subject

Finance

Date

Feb 20, 2024

Type

docx

Pages

2

Uploaded by SuperMoon10993

Report
MTH 101 Module 3 Finance Worksheet For the following problems, write your work and answers after the “ [Answer] ” prompt. 1. Gerry plans to purchase a $325,000 home with a 30-year mortgage and a 4.25% interest rate. Calculate his monthly payment to the nearest cent. [1,598.80$] 2. You decide to buy a house. The interest rate for a 30 years mortgage is 4.7%. You want your payment to be around $1,150 per month, what value of a house can you afford? [221,734.7018$] 3. You found the value of a home in question 2. You wish to put 20% down. How much is a 20% down payment? [44,346.9404$] 4. Consider the value of the house in #2. Assume you would rather have a 15-year mortgage with a 4.25% interest rate. If you maintain the $1,150 monthly payment, what is the value of the house you can afford? [152,868.936$] 5. What would be the 20% down payment? [30,573.77$] 6. Why is 20% the goal amount for a down payment on the purchase of a home? [ Because lenders generally require PMI when a borrower makes a down payment of less than 20%, as it protects the lender against the risk of default . ] 7. Between the 15-year mortgage and the 30-year mortgage, which one would be a better option for you? Why? [The 15 year is more affordable, because of less overall interest paid, a lower interest rate, lower fees, and forced savings . ] 8. What is the average daily balance used for regarding a credit card? [ To calculate interest when a cardholder carries a balance ] Revised 2/12/2024
MTH 101 9. You have a credit card and on January 1 the balance is $700. On January 8th you purchase a new sofa for $1100. On the 14th you make a payment of $550. On the 22nd you make a purchase of lamps and other household items for $475. a. Use the table below to find the average daily balance of the credit card for January. Date Adjustment End of Day Balance Days with Unchanged Balance Jan 1 700$ 700$ 7 Jan 8 700$+1100$ 1800$ 6 Jan 14 1800$-550$ 1250$ 7 Jan 22 1250$+475$ 1725$ 10 [ $1,345.16 . ] b. If the finance charge is 13.99% of the average daily balance, what is the finance charge? Note: the 13.99% is an Annual Percentage Rate (APR). Make the necessary adjustments for your calculation. [1.59$] Revised 2/12/2024
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help