2. They decide to shop for furnishings for the new house. They choose items that amount to $2400.00. The store has 2 fixed installment loan options for purchasing: Option 1: 20% down payment and financing at 7% simple interest per year for 2 years. Option 2: no down payment and financing at 7.75% simple interest for 3 years. Answer each of the following questions separately, showing all your work to reach each answer. A. Which option will result in smaller total finance charge? What will that total finance charge be? B. Which option will result in the smaller monthly payment? What will that monthly payment be? C. They decide to defer any purchases and invest in a savings account a $2400 bonus that Maria will be getting from work. The rate is 1.5% interest compounded every month. How much interest will they earn in 3 years? D. They decide to defer any purchases and loan the $2400 bonus to a needy relative at 3% simple interest per year. How long will the term of the loan need to be if they want to earn $300 in interest (assuming the loan is not paid off early).
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
2. They decide to shop for furnishings for the new house. They choose items that amount to $2400.00.
The store has 2 fixed installment loan options for purchasing:
Option 1: 20% down payment and financing at 7% simple interest per year for 2 years.
Option 2: no down payment and financing at 7.75% simple interest for 3 years.
Answer each of the following questions separately, showing all your work to reach each answer.
A. Which option will result in smaller total finance charge? What will that total finance charge be?
B. Which option will result in the smaller monthly payment? What will that monthly payment be?
C. They decide to defer any purchases and invest in a savings account a $2400 bonus that Maria will be getting from work. The rate is 1.5% interest compounded every month. How much interest will they earn in 3 years?
D. They decide to defer any purchases and loan the $2400 bonus to a needy relative at 3% simple interest per year.
How long will the term of the loan need to be if they want to earn $300 in interest (assuming the loan is not paid off early).
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
