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Cogito

Consumer Math · Chapter 4 · Lesson 2

Practice Worksheet

Loans and Amortisation

Where each payment actually goes.

12 problems · about 22 minutes · TEKS M.M.4.B

NameDate

Figure — use these to answer the problems

The interest and principal parts of one payment. Early in a loan the interest bar dominates.
Interest100
Principal60
Interest part100
Principal part60
Figure 1

Warm Up

Straightforward practice. Get the method working first.

5 problems

  1. $10000 at 0.5% a month. Interest this month, in dollars?

    Answer

  2. Where does an extra payment go?

    • Entirely to principal, cutting all future interest.
    • To next month interest.

  3. APR 6%. Monthly rate in percent?

    Answer

  4. $15000 at 0.5% a month. Interest in dollars?

    Answer

  5. Payment $400, interest $100. Principal part in dollars?

    Answer

Build It Up

The same ideas with more to keep track of.

3 problems

  1. $300 a month for 48 months. Total paid in dollars?

    Answer

  2. Borrowed $12000, total paid $14400. Total interest in dollars?

    Answer

  3. A longer term means a higher or lower total cost? 1 higher, 2 lower.

    Answer

Stretch Yourself

Mixed problems. Work out what kind of question it is before you start.

4 problems

  1. Sort each statement by where in a loan it applies.

    Write each item under the heading it belongs to: Most of the payment is interest · The balance is near its largest · Most of the payment is principal · The balance is nearly cleared

    Early in the loan

    Late in the loan

  2. $500 a month for 36 months. Total paid in dollars?

    Answer

  3. The Split

    A $20000 balance at 0.5% a month. Interest this month, in dollars?

    Answerdollars

  4. The Total

    $400 a month for 60 months. Total paid, in dollars?

    Answerdollars