10.4 Payment Written Practice

You will have three answers for each problem: Use the payment formula to calculate the monthly payment. (Be sure to show how you set up each problem.) Then calculate the total of the principal & interest payments made if the loan is paid off as scheduled. Finally, give the amount of interest that is paid.

1. $25,000 is borrowed for 10 years at 3.6% interest

2. $5,000 is borrowed for 5 years at 6% interest

3. $80,000 is borrowed for 20 years at 4.25 % interest

4. The purchase price of the house is $200,000. Buyers put down 15%, so they do NOT finance the entire cost. The remainder is financed at 3.5% interest for 30 years.

5. The purchase price of a piece of land is $170,000, but the buyers are able to put down 10%, so they do NOT finance the entire cost. The remainder is financed at 3 % for 15 years.