Contemporary Mathematics for Business and Consumers, Third Edition

Robert A. Brechner
Copyright © 2003 Thomson/South-Western

Level 1
Chapter 13 - Section I - Exercise 15

The Rocky Mountain Corporation has a $30,000 line of credit with NationsBank. The
annual percentage rate is the current prime rate plus 4.7%. The balance on March 1
was $8,400. On March 6, Rocky Mountain borrowed $6,900 to pay for a shipment of
supplies, and on March 17 they borrowed another $4,500 for equipment repairs. On
March 24, a $10,000 payment was made on the account. The billing cycle for March
has 31 days. The current prime rate is 9%.

Unpaid
Dates # of Days Activity Amount
balance Daily Balance
Previous
0.00
0.00 0.00
0.00 0.00
0.00 0.00
$0.00

a. What is the finance charge on the account?

Average daily balance = #DIV/0!

Current prime rate =

Add-on to current prime rate =

Periodic rate (rounded to hundredths) = 0.00%

Finance charge = #DIV/0!

b. What is Rocky Mountain's new balance?

New balance = #DIV/0!

c. On April 1, how much credit does Rocky Mountain have left on the account?

Line of credit =

Remaining credit = #DIV/0!

Contemporary Mathematics for Business and Consumers, Third Edition
Robert A. Brechner
Copyright © 2003 Thomson/South-Western

Level 2
Chapter 13 - Section II - Exercise 31

Ana Luisa Bridges is interested in buying a dining room set for her home. At Styline
Furniture, she picks out a seven-piece set for a total cash price of $1,899.00. The
salesperson informs her that if she qualifies for an installment loan, she may pay
10% now, as a down payment, and finance the balance with payments of $88.35
per month for 24 months.

a. What is the amount of the finance charge on this loan?

Purchase price =

Down payment percent =

Amount financed =

Monthly payment =

Total of payments =

Finance charge =

b. What is the total deferred payment price of the dining room set?

Total deferred price =

Contemporary Mathematics for Business and Consumers, Third Edition
Robert A. Brechner
Copyright © 2003 Thomson/South-Western

Level 3
Chapter 13 - Section II - Exercise 33

Dan Neely bought new fishing equipment with a 9% add-on interest installment loan
from his credit union. The purchase price of the equipment was $1,450.00. The credit
union required a 15% down payment and equal monthly payments for 48 months.
how much are Dan's monthly payments?
Contemporary Mathematics for Business and Consumers, Third Edition
Robert A. Brechner
Copyright © 2003 Thomson/South-Western

Level 3
Chapter 13 - Section II - Exercise 36

Van Mua purchased an artist's studio desk for $2,400. He made a

$700 down payment and financed the balance with an installment loan for
48 months. If Van's payments are $42.50 per month, use the APR formula
to calculate what annual percentage rate he is paying on the loan.
Contemporary Mathematics for Business and Consumers, Third Edition
Robert A. Brechner
Copyright © 2003 Thomson/South-Western

Level 2
Chapter 13 - Assessment Test - Exercise 12

After making 11 payments on a 36-month loan, you pay it off.

a. What is your rebate fraction?

Hint: Use Exel's Concatenate function to display the rebate fraction.

Number of payments =

Number of payments before pay-off =

Payments remaining =

Sum of digits payments remaining =

Sum of digits total payments =

Rebate fraction =

b. If the finance charge was $1,300, what is the amount of your finance charge rebate?

Finance charge =

Rebate amount =
Contemporary Mathematics for Business and Consumers, Third Edition
Robert A. Brechner
Copyright © 2003 Thomson/South-Western

Level 3
Chapter 13 - Assessment Test - Exercise 13

Internet Solutions financed a $68,000 circuit assembler with a 6 1/2% add-

on interest installment loan for 48 months. The loan required a 20% down payment.

a. What is the amount of the finance charge on the loan?

b. How much are the monthly payments?

c. What annual percentage rate is being charged on the loan?

d. If the company decides to pay off the loan after 22 months, what is the amount of the
loan payoff?