4 100.00 .09 5 100.00 .09 6 100.00 .09 7 100.00 .09 8 100.00 .09 Borrow $1000 for 5 years at an interest of 10%. Pay an equal amount of the principal each year plus the interest. Year Remaining Principal Interest Interest Payment Remaining Balance Amount Rate Amount Amount Balance (APR) 1 1000.00 200.00 .10 2 200.00 .10 3 200.00 .10 4 200.00 .10 5 200.00 .10 Answer Key Handout # 2 How Much Will It Really Cost? Borrow $500 for 5 years at an interest of 7%. Pay an equal amount of the principal each year plus the interest. Interest Principal Interest Remaining Payment Remaining Year Rate Balance Amount Balance Amount Amount (APR) 1 500 100 0.07 35 135 400 2 400 100 0.07 28 128 300 3 300 100 0.07 21 121 200 4 200 100 0.07 14 114 100 5 100 100 0.07 7 107 0 Total Paid: 605 Borrow $800 for 8 years at an interest of 9%. Pay an equal amount of the principal each year plus the interest. Interest Principal Interest Remaining Payment Remaining Year Rate Balance Amount Balance Amount Amount (APR) 1 800 100 0.09 72 172 700 2 700 100 0.09 63 163 600 3 600 100 0.09 54 154 500 4 500 100 0.09 45 145 400
4 100.00 .09 5 100.00 .09 6 100.00 .09 7 100.00 .09 8 100.00 .09 Borrow $1000 for 5 years at an interest of 10%. Pay an equal amount of the principal each year plus the interest. Year Remaining Balance Principal Amount Interest Rate (APR) Interest Amount Payment Amount Remaining Balance 1 1000.00 200.00 .10 2 200.00 .10 3 200.00 .10 4 200.00 .10 5 200.00 .10 Handout # 2 Answer Key How Much Will It Really Cost? Borrow $500 for 5 years at an interest of 7%. Pay an equal amount of the principal each year plus the interest. Year Remaining Balance Principal Interest Rate (APR) Interest Payment Amount Remaining Balance Amount Amount 1 500 100 0.07 35 135 400 2 400 100 0.07 28 128 300 3 300 100 0.07 21 121 200 4 200 100 0.07 14 114 100 5 100 100 0.07 7 107 0 Total Paid: 605 Borrow $800 for 8 years at an interest of 9%. Pay an equal amount of the principal each year plus the interest. Year Remaining Balance Principal Interest Rate (APR) Interest Payment Amount Remaining Balance Amount Amount 1 800 100 0.09 72 172 700 2 700 100 0.09 63 163 600 3 600 100 0.09 54 154 500 4 500 100 0.09 45 145 400
Grade%207%20Lesson%204%20Loans%20and%20Interest%20Rates.docx