Name___________________________________
Money Matters - Installment Loans - 1
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Use an annual percentage rate table to solve the problem.
1) A business owner spent $24,000 to upgrade her business showroom. She paid 20% as a down
payment and financed the balance of the purchase with a 24-month fixed installment loan with an
APR of 3%. Determine the business ownerʹs total finance charge and monthly payment.
A) Total finance charge = $604.80; Monthly payment = $825.20
B) Total finance charge = $2847.36; Monthly payment = $918.64
C) Total finance charge = $752.64; Monthly payment = $831.36
D) Total finance charge = $2938.08; Monthly payment = $1124.20
1)
2) A furniture outlet allows customers to finance their furniture purchases with a fixed installment
loan. Customers must pay a 10% down payment and finance the balance for 18 months at an APR
of 12.50%. Determine the total finance charge and monthly payment for a bedroom suite that costs
$3500 (including tax).
A) Total finance charge = $320.99 ; Monthly payment = $192.83
B) Total finance charge = $307.76; Monthly payment = $192.10
C) Total finance charge = $356.65; Monthly payment = $214.26
D) Total finance charge = $426.51; Monthly payment = $198.70
2)
3) A restaurant owner purchased a new dishwasher for $3500. She paid 20% down and financed the
balance with a 12-month fixed installment loan with an APR of 8.5%. Determine the total finance
charge and monthly payment for the loan.
A) Total finance charge = $130.48; Monthly payment = $244.21
B) Total finance charge = $138.32 ; Monthly payment = $244.86
C) Total finance charge = $182.70; Monthly payment = $306.89
D) Total finance charge = $215.32; Monthly payment = $251.28
3)
4) A carpenter spent $5500 to purchase a table saw , a circular saw, and a panel saw. He paid 15%
down and financed the balance with a 30-month fixed installment loan with an APR of 5.0%.
Determine the total finance charge and monthly payment for the loan.
A) Total finance charge = $955.10; Monthly payment = $187.67
B) Total finance charge = $339.41; Monthly payment = $167.15
C) Total finance charge = $971.30; Monthly payment = $215.71
D) Total finance charge = $308.08; Monthly payment = $166.10
4)
5) A family purchased a new ski boat for $14,000. The loan agency required a 5% down payment
and financed the balance for 36 months with an APR of 6.0%. Determine the total finance charge
and monthly payment for the loan.
A) Total finance charge = $1266.16; Monthly payment = $404.62
B) Total finance charge = $2262.40; Monthly payment = $451.73
C) Total finance charge = $2891.42; Monthly payment = $449.76
D) Total finance charge = $1375.22; Monthly payment = $407.65
5)
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