Consumer Mathematics Mathematics & Economics Math Problem

Consumer Mathematics Problem Sample
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After taking a debt loan, the money borrowed must be paid after a period at a specific interest, and the terms of the loans depending on the institution offering the loans, and credit score. Amortization is to determine the amount of money to be returned, and the corresponding interest, other options to repay the loan can be an annuity where a fixed amount of money returned periodically to settle the loan (Biehler, 2008). The values of the mortgage loans to own a house depend on the loan payment terms and are most common for 15 and 30-year mortgages. Loan payments are mostly monthly or annually, and it is necessary to consider the interest rate among various financial institutions and sources of financing as this determines the total loan repayment amounts. This paper will focus on how Simple Interest, mortgage financing, annuity payment, affect the loan financing and payment.
Interest is useful to measure the cost of a bank loan, and the measure is represented as a percentage of the total investment or credit. The interest rate is simple and not compound when the interest obtained at maturity is not added to the capital or loan to generate new interest. In compound interest, the monthly interest is added to the principal or capital and the interest in the next month, and this is more expensive than the simple interest. This interest rate is calculated on the initial loan or investment, mostly at an annual rate, but sometimes monthly, semi-annually or quarterly. The required monthly payment was $297.50, and the interest payment also depends on the time required to pay the loan fully.
Amount financed=$35,000-$28,000($7,000
Total installment price= $297.50*30= $8,925
Finance charge= $8,925.00 -$7,000
Interest rate= Total installment price / (private investment required$* annual rate) 8,925/ (7000*30/12) = 0.51% annually.
Annuities are equal payments made at equal intervals of time, mainly a year, which are the payment intervals. The annuities are paid at regular intervals and are equal payments, where the future value of the annuity is the sum of money at the end to be repaid including the interest accumulated (Biehler, 2008). The present value is the amount paid at the beginning of the annuity, and the timing of th...