Question

4. You want to buy a new car in 3 years which will cost $42,000. You plan to get a 5-year car loan at a 6% interest rate but don’t want your monthly payments to be over $300. You plan to save the rest needed by making monthly deposits into the bank, earning 7.5% on your money. How much do you need to save monthly over the next 3 years to reach your goal?

6. You are buying a new house on a 30-year, 5.2% mortgage loan of $230,000.

A. How much will your monthly payments be?

B. How much will go toward principal in the 75^th month? How much will go toward interest in the 75^th month? What will be the balance after 75 months?

C. How much interest will you pay in total over the 30 years?

D. If you do a 15-year loan instead of a 30-year one, how much will you save in total interest?

Answer 1

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