1. Ernest made a $3450 down payment on a $345 000 house and finances the remainder with a 25 year mortgage that has an annual interest rate of 3.2% compounded monthly. If Ernest makes monthly payments, how much will he pay in total for the house?

a. $496 626

b. $500 076

c. $501 642

d. $505 092

2. Peter and Paul both acquire a car. Peter leases his car for 48 months while Paul buys his car with a bank loan over 48 months. The costs both have are shown below:

After 48 months, Peter will buy out the lease for the residual amount shown. In total, how much more money will Peter have spent?

a. $692

b. $792

c. $13 908

d. $14 700

3. Arianna purchased a $215 000 house. She made a 15% down payment and financed the remainder at an annual interest rate of 4.8% compounded monthly for 25 years. What was her monthly payment?

Monthly Payment

Additional Costs (one-time)

Lease residual

Peter

$328.54

$390.00

$14 700

Paul

$618.29

$490.00

N/A

a. $1047 b. $1232 c. $7696 d. $8423

4. Debbie wants to buy her own golf cart. She needs to finance the entire amount and can get a 1-year loan with an annual interest rate of 12% compounded monthly. If the maximum monthly payment she can afford is $260, what is the most expensive golf cart she can purchase with the terms of this loan?

a. $2785 b. $2926 c. $3120 d. $3495

5. For a camping trip you have 2 options available:

Option A buy a used camper for $4875.00, financed with a loan requiring monthly payments of $214.31 over 2 years and then pay a campground site fee of $20/night.

Option B rent a cabin at the lake for $165/night

After how many nights of renting the cabin does it become cheaper to have purchased the camper?

a. 30

b. 32

c. 34

d. 36

6. Jenn is purchasing a $300 000 home and is considering the 2 financing options below:

Option A monthly payments on a 20-year mortgage with an annual interest rate of 4.75% compounded monthly

Option B a 10% down payment followed by monthly payments on a 25-year mortgage with an annual interest rate of 2.99% compounded monthly.

How much cheaper is Option B than Option A?

a. $51 590

b. $81 590

c. $128 330

d. $167 913