word problems Financial Literacy
1. Say you have $14,000 to invest into an investment account. You can either invest your money into an account with a 7% annual interest rate which is compounded quarterly, or an account with a 6.8% annual interest rate which is compounded monthly, which should you choose for a 15-year investment?
2. How much money would you have to invest in order to get $20,000 after 25 years in a 11% annual interest account that is compounded weekly?
3. Henry buys a large boat for the summer, however he cannot pay the full amount of $32,000 at once. He puts a down payment of $14,000 for the boat and receives a loan for the rest of the payment of the boat. The loan has an interest rate of 5.5% and is to be paid out over 4 years. What is Henry’s monthly payment, and how much does he end up paying for the boat overall?
4. Julie spends $634.90 using her credit card during the duration of her monthly credit card statement (March 4th to April 4th). By May 4th she still hasn’t paid off her credit card balance and has spent another $712.18. What is the credit card balance after the two months if her card has an interest rate of 21.99%?
5. The Jameses take out a mortgage on their $470,000 home. The mortgage has an interest rate of 4.6% and is amortized over 30 years by making monthly payments. How much will the James be paying each month on their home mortgage?