Handout question 6: Suppose you want to borrow $20,000 for a new car. You can borrow at 8% per year, compounded annually. If you take a 4 year loan, what is your annual payment?

Handout question 7: You ran a little short on your spring break vacation, so you put $1,000 on your credit card. You can afford only the minimum payment of $20 per month. The interest rate on the credit card is 1.5 percent per month. How long will you need to pay off the $1,000?