MATH 101 2013 Practice for Installment Loans APR 1. What is the monthly payment for a $20,000 loan (!0 ye PMT = 6.75% interest rate)? (-nd) APR Show the monthly payment, amount paid for interest, net payment to principal, and remaining balance for the first four months (this is called an amortization schedule): Month Payment Interestthis month) Net Payment (to principal) -New Principal 20,000 Describe what will happen to the numbers in the Interest column, and the numbers in the Net Payment colum b) How much will you pay altogether for this loan?c) How much interest will you pay altogether? 2. Let's buy a home that is listed at a price of$200,000. First we need a down payment of 10%. How much is the down payment? , How much will we borrow? 2b. The bank is offering a 30-year loan at 5% APR, or a 15-year loan at 4.5% APR (fixed rate). Compare you monthly payments and total loan cost for each of the two options. Then discuss the advantages and disadvantages of each plan. 30-year loan, 5% 15-year loan, 4.5% PMT= PMT- Total Cost: Total Cost: Conclusions