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Math 166 Quiz 10: F.3, F.4
Remember to show your work. Correct math is worth partial credit. Round to 2 decimal places.
1. (2 points) You paid a $2500 down payment on a used car. In order to pay the rest of the balance,
you got a loan from the bank for $10000 at an annual interest rate of 12.5%, compounded
monthly. What must your monthly payment be to pay off the loan in 15 years?
(2 points) What is your equity after 5 years?
(2 points) After 5 years, you refinance your loan to lessen the amount of time it will take to
pay off the loan. The bank offers you a 5 year loan on your remaining principal at an annual
interest rate of 18%, compounded monthly. What will your new monthly payment be?
(2 points) Which option charges the least amount of interest? Refinancing or keeping the
original loan? Be careful with how you compute the interest on the refinanced loan.
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2. (2 points) You find and purchase a 2 year old dog at the Aggieland Humane Society. Your
apartment complex charges a $15 a month pet fee. Additionally, the cost of the food for the
dog per month is $20. Assuming the dog will require no additional expenses and that the cost
of food and pet fee remain constant, you decide to put a lump sum of money to pay for the next
5 years of dog expenses into a bank account earning 5% annual interest, compounded monthly.
How much money must be placed in the account to pay for the next 5 years of dog expenses?
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