Aravinda makes $ 3450 a month before taxes, and has a monthly car payment of $ 350.
How much will a lender estimate he can spend on a mortgage payment?
Answer: a. $ 868
b. $ 966
c. $ 1207
d. $ 1625
Elise looks at the figure you produced above and says, “that’s a little rich for
my blood. I think I could scrounge up $ 5,000 right now, though.” If she puts that into a Certificate of Deposit at her local bank with 6% interest, compounded quarterly, how much will she have in 5 years?
Answer: a. $ 11,384.79
b. $ 9,870.43
c. $ 6,734.28
d. $ 5,942.06
If I put $ 2,000 in a Certificate of Deposit today, and the interest rate is 5% annually compounded quarterly, what will it be worth in two years?
Answer: a. $ 2208.97
b. $ 2100.53
c. $ 2200.00
d. $ 2050.25
Ping, a 19-year-old college student, just asked his mother if he could borrow $ 2,000 because he spent the rest of this semester’s loan money for the
semester on a trip to Hawaii for spring break. His mother thinks he’s being very irresponsible with his money, so she says yes on one condition: she will
charge him a simple interest rate of 10% annually. If he doesn’t pay his mother back until he graduates in two and a half years, how much interest will he
Answer: a. $ 250
b. $ 400
c. $ 500
d. None of these