- Cersei Lannister needs to borrow $20,000 for the next year. Bank North will give her the loan at 13.5%. Bank South will give her the loan at 10% with a $250 loan origination fee. Bank East will give her the loan at 16% with no fees. Bank West will give her a loan at 9% but charges a $500 loan origination fee. The loan is for 1 year.
- Determine the total interest and fees she will be charges in each case.
- B) Which loan should she chose?
- Little Finger has just borrowed $5,000 on a four year loan at 8% simple interest. Complete the Amortization table below for the first 5 month of the loan.
|Payment Number||Beginning Balance||Payment amount||Applied to interest||Applied to Principal||New Balance|
- Determine the cost of a Payday loan. Homer Simpson had a rough few months. He fell behind on his mortgage and is living paycheck to paycheck. He anticipates another mortgage payment of $1500 coming up very soon at the beginning of April and does not have the liquidity to pay it before his next paycheck on April 7th. He tries a payday loan that is run by Burns Corp on April 1st. The payday loan charges him a fee of $100 for his $1500 advance on his pay. He pays off his $1500 mortgage on April 2th with the payday loan. He gets paid $1500 on April 7th, but another bill comes up! Bart broke his arm skate boarding and the hospital bill of $1500 is due April 9th. Homer must now delay repayment to the Burns Corp. for the payday loan. They charge him another $100 to delay repayment another pay period (2 weeks). He pays off Bart’s hospital bill with his next paycheck (April 21st), but now his monthly taxes, credit cards and utilities of $1500 are due (April 23rd). He defers the payday loan for another pay period (to May 5th). They charge him another $100 to delay repayment for another 2 weeks. He gets paid and pays his credit card and utility bills, but then Marge has an accident with the family car, and they need to have it fixed! He defers repayment to Burns Corp. for payday loan again. They charge him another $100 to delay repayment. He finally gets his tax return check of $2000 and repays the payday loan.a) How much money does he pay to Burns Corp. for the Payday loans?
b) How much interest would he have paid if he used his credit card with a 21.99% APR instead of a payday loan.
- You are borrowing $5,000 on a 3 year, 7% add-on interest loan. What will your payments be?
- Ned Flanders wants to purchase a new car for $45,000. He has no savings, so he needs to finance the entire purchase amount. With no down payment, the interest rate on the loan is 7% and the maturity of the loan is 6 years. His monthly payments will be $903.33. He earns $650.00 a month. He has a credit card limit of $10,000 and an interest rate of 25%. If he uses all of his monthly earnings to make the monthly payments on the car:a) how much will he add each month to his credit card balance if he uses it to finance the remainder of the car?
- b) What will the finance charges are on his credit card for the first 4 months that finance charges apply? (Assuming he makes no payments towards his credit card).
- You graduated from college a year ago and forgot to pay one of your student loans. Now it is in default and you are being contacted by a collections agency. It is a private loan. What do you do? How do you fix it?