30. Kevin bought a new car for $22,000. He made a down payment of $9,500 and has

Question

30. Kevin bought a new car for $22,000. He made a down payment of $9,500 and has monthly payments of $308.10 for 4 years. He is able to pay off his loan at the end of 30 months. Using the actuarial method, find the unearned interest and payoff amount.

A) u = $356.02; payoff amount: $5,853.88 B) u = $391.62; payoff amount: $4,948.08 C) u = $356.02; payoff amount: $5,497.86 D) u = $391.62; payoff amount: $6,047.65

31. Aaron had an unpaid balance of $1,384.00 on his credit card statement at the beginning of January. He made a payment of $480.00 during the month. If the interest rate on Aaron's credit card was 8% per month on the unpaid balance, find the finance charge and the new balance on February 1. A) Finance charge = $120.86; new balance = $1,024.86 B) Finance charge = $108.83; new balance = $1,012.83 C) Finance charge = $110.72; new balance = $1,014.72 D) Finance charge = $114.83; new balance = $1,018.83

32. A house sells for $488,500 and a 30% down payment is made. A 30-year mortgage at 6.5% was obtained. Find the monthly payment and the total interest paid.

A) Monthly payment = $2,261.11; total interest paid = $472,049.60 B) Monthly payment = $2,161.12; total interest paid = $436,053.20 C) Monthly payment = $2,170.23; total interest paid = $439,332.80 D) Monthly payment = $2,152.97; total interest paid = $433,119.20

33. An investor purchased 900 shares of stock for $30.53 per share and sold them later for $32.57 per share. The broker's commission was 3% of the purchase price and 3% of the selling price. Find the amount the investor made on the stock. A) $1,780.92 B) $132.30 C) $–132.30 D) $–119.07

Explanation / Answer

33.

the investor purchased = 900 stocks

cost per stock = $ 30.53

=> the investor paid = 900*30.53 = $ 27477

the brokers commission was = 3% of 27477 = $ 824.31

so the investor paid a total amount of = 27477 + 824.31 = $ 28301.31

later on the investor sold the stock for = $ 32.57 per stock

=> total money made = 900*32.57 = $ 29313

the investor had to pay a commision of 3% to the broker on the selling price = 3% of 29313 = $ 879.39

hence the investor was left with = 29313 - 879.39 = $ 28433.61

hence the investor made = 28433.61 - 28301.31 = $ 132.3

OPTION (B) is correct

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