# • Unit 4 start date: ____01/02/2014_____________…

### Question Description:

• Unit 4 start date: ____01/02/2014_____________ Question 1 (10 points) 1. You decide to take out a simple interest loan for $5000, at 7% yearly interest on the date that unit 4 starts for you. If you repay the loan on December 31st (at the end of the current year)… a) How much do you pay total when you pay off the loan? b) How much interest do you pay? Question 2 (15 points) 2. You decide to take out a $20000 simple interest loan at 4%, on the date unit 4 started for you. a) In 45 days you decide to pay off $8000 of the loan. What is your new principal? Explain how you got the answer. b) 30 days after the first payment, you pay another $6000. What is your new principal? Explain how you got the answer you did. c) 45 days after the 2nd payment, your loan comes due. How much do you need to pay then? Explain your reasoning. Question 3 (5 points) 3. You need $400 badly, and decide to write a check at a check cashing place to get that money. Assuming you much write the check for $500 to get the $400 in cash, and the check will be cashed in 2 weeks, what simple interest rate did you just pay? Assume 52 weeks in a year for this problem