Jack needs to borrow $1,000 for the next year. Bank South will give him the loan at 9 percent. Suncoast bank will give him the loan at 7 percent with a $50 loan origination fee. First National will give him the loan at 6 percent with a $25 loan origination fee. Determine the total interest and fees Jack will be charged in each case. Which loan should Jack choose?
1. Tracy is borrowing $8,000 on a six-year, 11 percent, add-on interest loan. What will tracy's payments be?
2. Sharon is considering the purchase of a car. After making the down payment, she will finance $15,500. Sharon is offered three maturities. On a four-year loan, Sharon will pay $371.17 per month. On a five-year loan, Sharon's monthly payments will be $306.99. On a six-year loan, they will be $264.26. Sharon rejects the four-year loan, as it is not within her budget. How much interest will Sharon pay over the life of the loan on the five-year loan? On the six-year loan? Which should she choose if she bases her decision solely on the total interest paid?
3. Refer to question 4. If Sharon had been able to afford the four-year loan, how much interest would she have saved compared to the five year loan?
46. Bill wants to purchase a new car for $45,000. Bill has no savings, so he needs to finance the entire purchase amount. With no down payment, the interest rate on the loan is 13 percent and the maturity of the loan is 6 years. His monthly payments will be $903.33. Bill's monthly net cash flows are $583.00. Bill also has a credit card with a $10,000 limit and an interest rate of 18 percent. If bill uses all of his net cash flows to make the monthly payments on the car, how much will he add each month to his credit card balance if he uses it to finance the remainder of the car? What will the finance charges be on his credit card for the first two months that finance charges apply?