1. which type of debt is most often secured?
a. mortgage
2. A(n) _____ is considered unsecured debt
d. credit card
3. you (or your parents) are purchasing a car for $18,965 plus 6.25% sales tax. The down payment is $1,500. What is the difference in the accured in interest at the end of the first month between the average and the excellent credit ratings?
Excellent secured APR: 3.95% = 0.3291% for 1 month
Average secured APR: 4.90% = 0.4083% for 1 month
18,965 x 1.0625 = 20,150.31 - 1,500 dp = 18,650.31 (0.4083%-0.3291%) = 18,650.31 0.0792% = 1,477/10 / 100% = 14.77 nearest to Choice C 14.47.
4. you (or your parents) purchase a car for $28,125 plus 7.5% sales tax. The down payment is $3,125. You have a fair credit rating. What is your new principal balance at the beginning of the second month if you pay $529.79 at the end of the first month?
Fair secured apr: 5.60% = 0.4666% for 1 month
28,125 x 1.075 = 30,234.38 - 3125 = 27,109.38
27,109.38 x 1.004666 = 27,235.87 - 529.79 = 26,706.08 nearest to Choice A. 26,706.14
