## Financial Algebra 1st Edition Chapter 4 Consumer Credit

**Page 211 Problem 1 Answer**

Given; six laws regulate consumer credit in the United States.

To find; Find when each act was signed into law.

What problem was the act trying to help solve?

What are the major provisions of each act?

Prepare a poster displaying your findings.

we have given laws

Equal Credit Opportunity Act

Electronic Funds Transfer Act

Fair Credit Reporting Act

Fair Credit Billing Act

Fair Debt Collection Practices Act

Truth-in-Lending Act

The Equal Credit Opportunity Act was signed on October 28,1974.

The act was trying to solve discrimination against applicants by a creditor.

The act made it unlawful to discriminate on the basis of race, color, religion, sex, national origin, etc.

The Electornic Funds Transfer Act was signed on November 10,1978.

The act established the rights, liabilities and responsibilities of everybody involved in electronic funds transfers.

Thus the act was trying to solve the lack of law with regards to electronic funds transfers.

The Fair Credit Reporting Act was signed on October 26, 1970.

The act was trying to solve the lack of accuracy, fairness and privacy of consumer information.

The Fair Credit Billing Act was signed in1974.

The act was trying to protect consumers from unfair billing practices and to create a set guideline in dealing with billing errors of credit/charge card accounts.

The Fair Debt Collection Practices Act was signed on September 20,1977.

The act was trying to eliminate abusive practices involving consumer debts and promoting fair debt collection.

Moreover, the act also provided people with a right to dispute the debt information.

The Truth-in-Lending Act was signed on May 29,1968.

The act was trying to eliminate the lack of informaton given to consumers and to provide a standardized manner to calculate costs associated with the debt.

Hence we have discuss about the laws , signed date and problem

Equal Credit Opportunity Act

Electronic Funds Transfer Act

Fair Credit Reporting Act

Fair Credit Billing Act

Fair Debt Collection Practices Act

Truth-in-Lending Act

**Page 211 Problem 2 Answer**

Given; Here we have given that we have to Visit two lending institutions in your area

To find; Find the APR, monthly payment, and finance charge for a $15,000, three-year loan at the two lenders.

]”financer”, which compares different lending institutions and some other useful information about loans at those lending institutions including the monthly payment,

the APR and the total cost (finance charge).

For example, Sofi will lend 15,000

for an estimated Annual Periodic rate of 5.49% to 12.99%.

It’s monthly payback would be $452.87, while the total finance charge (total cost) would be $1,303.35.

Since there are 36 months in 3 years, the total monthly payback would be 36×$452.87=$16,303.32 (product of number of months and the monthly payment).

Another lending institution dabur will lend $15,000 for an estimated Annual Periodic rate of 4.99% to 29.99%.

Its monthly payback would be $455.25,while the total finance charge (total cost) would be $1,388.86.

Since there are 36 months in 3 years, the total monthly payback would be 36×$455.25=$16,389

(product of number of months and the monthly payment).

Hence we conclude that there are 36 months in 3 years, the total monthly payback would be36×$455.25=$16,389 product of number of months and the monthly payment).

**Page 212 Problem 3 Answer**

Given; information on the FICO score.

To find: What is the range of possible scores?

How can each score be interpreted?

What contributes to the FICO score? Summarize the information you find from the websites.

Prepare your information in a report.

The FICO score ranges from 300 to 850.

A FICO score is a credit score, which takes into account the payment history, the amount of debts, the types of credit used, the length of credit history and new credit accounts.

The FICO score determines how worthy a possible borrower is of being given a loan.

A FICO score of 800+is considered to be exceptional.

A FICO score of 740 to 799 is considered to be very good.

A FICO score of 670 to 739 is considered to be good.

A FICO score of 580 to 669 is considered to be below average.

A FICO score of 579 or less is considered to be poor.

People with a FICO score below 620 might have trouble finding loans at a favorable rate.

You we can improve your FICO score by paying your bills on time, keeping a low balance on credit cards and paying off debts.

Hence we cocnlude that the Range from 300 to 850

The FICO score determines how worthy a possible borrower is of being given a loan.

The payment history, the amount of debts, the types of credit used, the length of credit history and new credit accounts all contribute to the FICO scores.

**Page 212 Problem 4 Answer**

Given ; There are three major credit reporting agencies in the United States.

they are named Equifax, Experian, and TransUnion.

They keep records of your credit activity and provide your potential creditors with information on your financial habits.

To find ; Summarize the information you obtain in a report.

Equifax gives out credit scores of consumers, where the credit scores are based on information of over 800 million consumers and more than 88 million businesses.

Equifax is based in Atlanta and was founded in 1899. The company was founded by Cator and Guy Woolford.

The company proves credit and demographic data to business and sells credit monitoring to consumers along with fraud-prevention services.

The company had a revenue of approximately3.362

billion U.S. dollars in 2017 , while it had a net income of 587.3 million dollars in 2017.

The company also had approximately 10,300 employees in 2017.

Experian gives out credit scores of consumers, where the credit scores are based on information of over 1 billion people and over 25 million businesses.

Experian is based in Dublin, Ireland (although it also operates in the UK, the US, Brazil and 33 other countries).

The company was founded in 1996 and its current CEO is Brian Cassin.

The company proves credit services, but also sells analytic decisions and marketing assistance to businesses.

The company had a revenue of approximately 4.335 billion U.S. dollars in 2017, while it has a net income of 0.865 billion dollars in 2017.

The company also had approximately 15,587 employees in 2017.

TransUnion gives out credit scores of consumers, where the credit scores are based on information of over 1 billion people and over 65,000 businesses.

TransUnion is based in Chicago, Illinois. The company was founded in 1968 and its current CEO is James M. Peck.

The company proves credit services, but also sells credit and fraud-protection products.

The company had a revenue of approximately 1.93 billion U.S. dollars in 2017, while it has a net income of 120.6 billion dollars in 2016.

The company also had approximately 4,700 employees in2016.

Hence we have given teh information about the theree major credit reporting agencies

Equifax was found in 1899 and is based in Atlanta.

Experian was founded in1996 and is based in Dublin, Ireland.

TransUnion was founded in1968 and is based in Chicago, Illinois.

**Page 212 Problem 5 Answer**

Given; finance charges for a 31000 new-car loan over a five-year period.

Prepare your information on a poster.

To find: Find the APR, monthly payment, and finance charges

Here we will use a site called “financer”, which compares different lending institutions and some other useful information about loans at those lending institutions including the monthly payment, the APR and the total cost (finance charge).

For example, freedomplus will lend $30,000 for an estimated Annual Periodic rate of 4.99% to 29.99%.

Its monthly payback would be $572.90, while the total finance charge (total cost) would be $4,373.97.

However, if you decide to lend $35,000, then the monthly payback becomes$668.38 and the finance charge (total cost) becomes $5,102.97

Another lending institution personalloands will lend $30,000 for an estimated Annual Periodic rate of 5.99%to 29.99%.

It’s monthly payback would be $579.84, while the total finance charge (total cost) would be $4,790.67.

However, if you decide to lend $35,000, then the monthly payback becomes $676.49 and the finance charge (total cost) becomes$5,589.12.

Hence we conclude that the monthly payback becomes $676.49 and the finance charge (total cost) becomes $5,589.12.

**Page 212 Problem 6 Answer**

Given; When the bank representative comes to speak, act as moderator for the discussion. Keep a log of the questions and which student asked them

To find: Write a thank you letter to the bank representative after the session.

Here are some of the the question which we can ask from the representative the local bank representative about loans and credit cards:

How much money can you borrow? Minimum? Maximum?

What are the conditions to be able to get a loan?

What costs should you expect to pay on a loan?

What are the possible terms on a loan?

What will happen when you fail to make multiple payments on a loan?

How old do you have to be to qualify for a credit card?

What costs should you expect to pay on a credit card?

What will happen when you fail to make multiple payments on a credit card? etc.

Hence we have high lighted Some possible questions that you could ask the local bank representative about loans and credit cards:

How much money can you borrow? Minimum? Maximum?

What are the conditions to be able to get a loan?

What costs should you expect to pay on a loan?

What are the possible terms of a loan?

What will happen when you fail to make multiple payments on a loan?

How old do you have to be to qualify for a credit card?

What costs should you expect to pay on a credit card?

What will happen when you fail to make multiple payments on a credit card? etc.

**Page 212 Problem 7 Answer**

Given: Interview your parents or relatives about their use of loans and credit cards.

To find; Find what they consider wise spending habits, and what they have learned about credit.

If they agree to let you see their last credit card statement, show them how to check entries in the statement, including the average daily balance and the finance charge.

Here are Some possible questions that you could ask your family members about loans and credit cards:

How much money did you borrow? How much did you still need to pay off?

What did you borrow money for?

What were the conditions to be able to get a loan?

What costs should you expect to pay on a loan?

How long till the loan is paid off?

When should you get a loan? What is a good reason to get a loan?

What costs should you expect to pay on a credit card?

Which purchases should you use a credit card for?

How regularly should you make payments to a credit card?

Should you pay off your debts on a credit card as soon as possible? etc.

Hence we have given examples of Some possible questions that you could ask your family members about loans and credit cards:

How much money did you borrow? How much did you still need to pay off?

What did you borrow money for?

What were the conditions to be able to get a loan?

What costs should you expect to pay on a loan?

How long till the loan is paid off?

When should you get a loan? What is a good reason to get a loan?

What costs should you expect to pay on a credit card?

Which purchases should you use a credit card for?

How regularly should you make payments to a credit card?

Should you pay off your debts on a credit card as soon as possible? etc.

**Page 212 Problem 8 Answer**

Given; Go to the store and interview a customer service representative

To find; Find out if any local store has an installment plan. Get the monthly payment and finance charge for a specific item in the store, purchased under the installment plan.

Prepare a report for the class.

An installment plan is a sum of money that needs to be paid in small amounts over a fixed period.

More precisely, the installment plan is then a type of loan.

The length of an installment plan can vary from a few months to 30 years, while a mortgage is a type of installment loan.

For example, Apple offers an installment loan on the purchase of an iPhone. The loan is a 24-month loan at a 0% annual periodic rate (APR).

The monthly payments will then be the total purchase price divided by 24, as we do not have to pay any finance charge at an APR of 0% and thus the finance charge is $0

Hence we conclude that The monthly payments will then be the total purchase price divided by 24, as we do not have to pay any finance charge at an APR of 0%

and thus the finance charge is

**Page 212 Problem 9 Answer**

Given; lists the terms and conditions of major credit cards.

To find; Research two different cards by going to the provider’s links. Compare and contrast the advantages and disadvantages of each.

There are different website which compares different types of credit cards.

For example, I compared low rate credit cards, when you expect to spend about $2,000 per month.

A possible credit card is the low rate credit card of ANZ, which requires an annual fee of$58 and has an annual interest rate of 12.49%.

You will also have to pay 0% interest for the first 15 months when transferring the money to a different credit card account and 21.74% interest afterwards.

Another possible credit card is the low-rate credit card of ANZ, which requires an annual fee of$0

(no annual fee) and has an annual interest rate of 11.8%.

You will also have to pay 11.80% interest when transferring the money to a different credit card account.

Hence we have compared and contrasted some of the points of credit card and some of the advantages and disadvantages

**Page 213 Problem 10 Answer**

Given; The circumference of the earth is approximately 24,901 miles at the equator measure of typical credit card measures 54mm by 85mm.

To find; How many credit cards (end to end) would it take to circle the earth?

we have measure of credit card 54mm by 85mm.

we know the circumference of a circle is C=2πr

here we will take r=85/2

=42.5

Now 24901=42.5

=585.90

Hence there will be 586 credit card will be required

**Page 213 Problem 11 Answer**

Given that the circumference of the earth is approximately 24,901 miles at the equator measure of typical credit card measures 54mm by 85mm.

To find; How many credit cards (end to end) would it take to circle the earth?

we have a measure of credit card54mm by 85mm.

here we will take r=85/2

we know the circumference of a circle is C=2πrnow 24901=42.5

=585.90

Hence there will be 586 credit cards will be required

**Page 213 Problem 12 Answer**

Given; The typical credit card measures 54 mm by 85mm.

To find: How many times would 1 billion credit cards circle the earth at the equator?

we have given a measure of credit card 54mmby85mm.

One billion is equal to 1,000,000,000

1,000,000,000/85

=11764705

Hence we conclude that that11764705 times would 1 billion credit cards circle the earth at the equator

**Page 213 Problem 13 Answer**

Given; Shania bought a $1,455 drum set on the installment plan.

The installment agreement included a 15 % down payment and 18 monthly payments of 80.75 each.

To find; How much is the down payment

Purchase price: $1,455

Down payment rate=15\%

Monthly payment= $80.78

Number of months =18

The down payment is the product of the down payment rate and the purchase price:

Down payment =Down payment rate × Purchase Price

=15%×$1,455

=0.15×$1,455

=$218.25

Hence the monthly down payment is found to be =$218.25

**Page 213 Problem 14 Answer**

Given: Shania bought a 1455 drum set on the installment plan.

The installment agreement included a 15% down payment and 18 monthly payments of 80.78 % each

To find; What is the total amount of the monthly payments?

Purchase price: $1,455

Down payment rate=15%

Monthly payment= $80.78

Number of months=18

The total amount of the monthly payments is the product of the number of months and the monthly payment:

Total amount of the monthly payments =Number of months × Monthly payment

=18×$80.78

=$1,454.04

Hence the total amount of the monthly payments will be =$1.454.04

**Page 213 Problem 15 Answer**

Given; Shania bought a $ 1455 drum set on the installment plan.

The installment agreement included a 15 % down payment and 18 monthly payments of 80.75 each.

To find: How much will Shania pay for the drum set on the installment plan

Purchase price:$1,455

Down payment rate=15\%

Monthly payment= $80.78

Number of months=18

The down payment is the product of the down payment rate and the purchase price:

Down payment = Down payment rate $\times$ Purchase Price

=15%×$1,455

=0.15×$1,455

=$218.25

The total amount of the monthly payments is the product of the number of months and the monthly payment:

Total amount of the monthly payments = Number of months × Monthly payment

=18×$80.78

=$1,454.04

The total cost is the sum of the total amount of the monthly payments and the down payment:

Total cost = Total amount of the monthly payments+ Down payment

=$1,454.04+$218.25

=$1,672.29

Hence The amount of money will Shania pay for the drum set on the installment plan is =$1,672.29

**Page 213 Problem 16 Answer**

Given: Shania bought a 1455 drum set on the installment plan.

The installment agreement included a 15 % down payment and 18 monthly payments of 80.78 each.

To find: What is the finance charge

we have given :

Down payment rate=15%

Monthly payment= $80.78

Number of months=18

Down payment = Down payment rate Purchase Price

=15%×$1,455

=0.15×$1,455

=$218.25

The total amount of the monthly payments is the product of the number of months and the monthly payment:

Total amount of the monthly payments = Number of months Monthly payment

=18×$80.78

=$1,454.04

Total cost = Total amount of the monthly payments +Down payment

=$1,454.04+$218.25

=$1,672.29

Finance Charge = Total cost − Purchase price

=$1,672.29−$1,455

=$217.29

Hence the finance charge for Shania will be $217.29

**Page 213 Problem 17 Answer**

Given; that Carly took a $7,000, three-year loan with an APR of 8.15%

To find; What is the monthly payment?

We have P= 7,000

r= 0.0815

And t= 3

⇒ \(M=\frac{7000\left(\frac{0.0815}{12}\right)\left(1+\frac{0.0815}{12}\right)^{12(3)}}{\left(1+\frac{0.0815}{12}\right)^{12(3)}-1}\)

⇒ \(M=\frac{7000\left(\frac{0.0815}{12}\right)\left(1+\frac{0.0815}{12}\right)^{36}}{\left(1+\frac{0.0815}{12}\right)^{36}-1}\)

⇒ \(\left(7000(0.0815 / 12)(1+0.0815 / 12)^{\wedge} 36\right) /\left((1+0.0815 / 12)^{\wedge} 36-1\right)\)

Hence the monthly payment will be $219.84

**Page 213 Problem 18 Answer**

Given; that Carly took a $7,000,three-year loan with an APR of 8.15%

To find; What is the total amount of the monthly payments?

We have P= 7,000

r= 0.0815

And t= 3

⇒ \(M=\frac{7000\left(\frac{0.0815}{12}\right)\left(1+\frac{0.0815}{12}\right)^{12(3)}}{\left(1+\frac{0.0815}{12}\right)^{12(3)}-1}\)

⇒ \(M=\frac{7000\left(\frac{0.0815}{12}\right)\left(1+\frac{0.0815}{12}\right)^{36}}{\left(1+\frac{0.0815}{12}\right)^{36}-1}\)

⇒ \(\left(7000(0.0815 / 12)(1+0.0815 / 12)^{\wedge} 36\right) /\left((1+0.0815 / 12)^{\wedge} 36-1\right)\)

Now the total monthly payment will be

219.84×36=7,914.24

hence the total monthly payment will be $7,914.24

**Page 213 Problem 19 Answer**

Given; Carly took a $7,000, three-year loan with an APR of 8.15%.

To find; What is the finance charge?

We have P= 7,000

r= 0.0815

And t= 3

⇒ \(M=\frac{7000\left(\frac{0.0815}{12}\right)\left(1+\frac{0.0815}{12}\right)^{12(3)}}{\left(1+\frac{0.0815}{12}\right)^{12(3)}-1}\)

⇒ \(M=\frac{7000\left(\frac{0.0815}{12}\right)\left(1+\frac{0.0815}{12}\right)^{36}}{\left(1+\frac{0.0815}{12}\right)^{36}-1}\)

⇒ \(\left(7000(0.0815 / 12)(1+0.0815 / 12)^{\wedge} 36\right) /\left((1+0.0815 / 12)^{\wedge} 36-1\right)\)

(7000(0.0815/12)(1+0.0815/12)^36)/((1+0.0815/12)^36−1)

Now the total monthly payment will be 219.84×36=7,914.24

Now the finance charge will be 7,914.24−7,000=914.24

Hence the finance charge for Carly will be $914.24

**Page 213 Problem 20 Answer**

Given; that Sarah is taking out a $24,400 four-year new-car loan with an APR of 6.88%

To find out what is the finance charge for this loan? Round to the nearest hundred dollars.

We have p =24,400

r= 0.0688

t = 4

⇒ \(M=\frac{24400\left(\frac{0.0688}{12}\right)\left(1+\frac{0.0688}{12}\right)^{12(4)}}{\left(1+\frac{0.0688}{12}\right)^{12(4)}-1}\)

⇒ \(M=\frac{24400\left(\frac{0.0688}{12}\right)\left(1+\frac{0.0688}{12}\right)^{48}}{\left(1+\frac{0.0688}{12}\right)^{48}-1}\)

⇒ \(\frac{24400(0.0688 / 12)(1+0.0688 / 12)^{48}}{(1+0.0688 / 12)^{48}-}\)

Now the monthly payment of $582.93

Now the total monthly payment is 582.93×48=27,980.64

finance charge 27,980.64−24,400=3,580.64

Hence the finance charge will be =$3,600

**Page 214 Exercise 1 Answer**

Given; The policy of the Black Oyster Pawnshop is to lend up to the value of a borrower’s collateral.

Pete wants to use a $2,000 guitar and a $900 camera as collateral for a loan

To find; What is the maximum amount that he could borrow from Black Oyster?

The collateral is a $2,000 guitar and a $900

camera: Total collateral =$2,000+$900

=$2,900

The amount that Pete can borrow is 30% of the total collateral

The amount that can be borrowed =30%×Total collateral

=0.30×$2,900

=$870

Hence the maximum amount that he could borrow from Black Oyster would be $870

**Page 214 Exercise 2 Answer**

Given: Juan purchased a tool set for $t on the installment plan.

He made a 15 % down payment and agreed to pay $m per month for the next y years

To find: Express the finance charge algebraically.

Purchase price: t dollars

Down payment rate =15%

Monthly payment=mdollars

Number of months =y years =12y months

Down payment = Down payment rate×Purchase Price

=15%×t

=0.15×t

=0.15t

The total amount of the monthly payments= Number of months × Monthly payment

=12y×m

=12my

The total cost is the sum of the total amount of the monthly payments and the down payment:

The finance charge is then the total cost decreased by the purchase price:

Finance Charge = Total cost − Purchase price

=(12my+0.15t)−t

=12my+0.15t−1y

=12my+(0.15−1)t

=12my−0.85t

Hence the finance charge algebraically will be shown as 12my−0.85t

**Page 214 Exercise 3 Answer**

Given; that the finance charge on Lauren’s credit card bill last month was $13.50.

Her APR is 18 %

To find; What was her average daily balance?

APR=18%

Finance charge =$13.50

The APR is the annual periodic rate.

The monthly periodic rate is then the annual periodic rate divided by 12,

Monthly periodic rate = APR / Number of months in a year

=18%/12

=1.5%

The finance charge is the product of the average daily balance and the monthly percentage rate:

Finance charge = Monthly percentage rate × Average daily balance Divide each side by the monthly percentage rate

Average daily balance = Finance charge / Monthly percentage rate

=$13.50/1.5%

=$13.50/0.015

$900.00

Hence her average daily balance will be $900.00

**Page 214 Exercise 4 Answer**

Given; a loan with an APR of 19.5 %

To find; What is the monthly period rate

we have APR=19.5%

The APR is the annual periodic rate.

The monthly periodic rate is then the annual periodic rate divided by 12,

Monthly periodic rate= APR / Number of months in a year

=19.5%/12

=1.625%

Hence the monthly period rate will be 1.625%

**Page 214 Exercise 5 Answer**

Given; that Harold borrowed $ 8,000 for five years at an APR of 6.75 %

To find out: What is Harold’s monthly payment?

We have

p= 8,000

r= 0.0675

t= 5

⇒ \(M=\frac{8000\left(\frac{0.0675}{12}\right)\left(1+\frac{0.0675}{12}\right)^{12(5)}}{\left(1+\frac{0.0675}{12}\right)^{12(5)}-1}\)

⇒ \(M=\frac{8000\left(\frac{0.0675}{12}\right)\left(1+\frac{0.0675}{12}\right)^{60}}{\left(1+\frac{0.0675}{12}\right)^{60}-1}\)

⇒\(\left(8000(0.0675 / 12)(1+0.0675 / 12)^{\wedge} 60\right) /\left((1+0.0675 / 12)^{\wedge} 60-1\right)\)

Hence the monthly payment for Harold will be Monthly payment =$157.47

**Page 214 Exercise 6 Answer**

Given; that Harold borrowed $8,000 for five years at an APR of .6.75 %

To find; What is the total amount that Harold paid in monthly payments for the loan

we have

p=8,000,

r=0.0675

t=5

⇒ \(M=\frac{8000\left(\frac{0.0675}{12}\right)\left(1+\frac{0.0675}{12}\right)^{12(5)}}{\left(1+\frac{0.0675}{12}\right)^{12(5)}-1}\)

⇒ \(M=\frac{8000\left(\frac{0.0675}{12}\right)\left(1+\frac{0.0675}{12}\right)^{60}}{\left(1+\frac{0.0675}{12}\right)^{60}-1}\)

(8000(0.0675/12)(1+0.0675/12)^60)/((1+0.0675/12)^60−1)

⇒ Monthly payment =$157.47 now the total monthly payment is 157.47×60=9,448.20 =$9,448.20

Hence the total amount that Harold paid in monthly payments for the loan was $9,448.20

**Page 214 Exercise 7 Answer**

Given that the amount borrowed is $8000

From the above question we have got the total monthly payment as $9,448.20

We have to find the amount Harold will pay in finance charges.

Given that the amount borrowed is $8000

Now we have the finance charges can be found by subtracting the amount borrowed from the total amount of monthly charges which is

Finance charge = Total of the monthly payments − Amount borrowed

=$9,448.20−$8,000

=$1,448.20

Hence we have got the amount of finance charges that will be paid by Harold as $1,448.20

**Page 215 Exercise 8 Answer**

Given that Ciana wants to take out a $7,500 loan with a 5.3% APR.

She can afford to pay $128 per month for loan payments.

We have found the length of her loan.

Now we have the loan formulas as \(t=\frac{\ln \frac{M}{p}-\ln \left(\frac{M}{p}-\frac{r}{12}\right)}{12 \ln \left(1+\frac{r}{12}\right)}\)

On substituting the values given we have \(t=\frac{\ln \frac{128}{7,500}-\ln \left(\frac{128}{7,500}-\frac{0.053}{12}\right)}{12 \ln \left(1+\frac{0.053}{12}\right)}\)

= 5.66

≈5.7

So we have the length of the loan as 5.7 years.

Hence the length of the loan is 5.7 years.

**Page 215 Exercise 9 Answer**

Given that Ciana wants to take out a $7,500 loan with a 5.3% APR.

She can afford to pay $128 per month for loan payments.

We have to find the increase of $20 to the monthly payment have do to the length of her loan

⇒ \( t=\frac{\ln \frac{148}{7,500}-\ln \left(\frac{148}{7,500}-\frac{0.053}{12}\right)}{12 \ln \left(1+\frac{0.053}{12}\right)}\)

=4.79

≈ 4.8

Now We have the loan length from the previous problem is 5.7 years.

Now we have the new length of the loan for the new monthly payment of $148 is

Now we can find the increase in the monthly payment as the difference between the old and the new loan length is

5.7−4.8=0.9 years

On the increase of the monthly amount by $20 the length of the loan will decrease by 0.9 years

Hence we can say that On an increase of monthly amount by $20 the length of the loan will decrease by 0.9 years

**Page 215 Exercise 10 Answer**

We have to find what is the total of all of the purchases made this billing cycle

The total of all the payments will be given in the credit card statement under the SUMMARY section underneath the New Purchases;

According to the given credit card statement we have

Total new purchases =$2,057.55

Hence we have the total new purchase from the given credit card statement is $2,057.55

**Page 215 Exercise 11 Answer**

We have to find the amount of total payments.

The total of all the payments will be given in the credit card statement under the SUMMARY section underneath the Payments/Credits;

According to the given credit card statement we have

Amount of total payments =$1,340.00

Hence we have the Amount of total payments from the given credit card statement is $1,340.00

**Page 214 Exercise 12 Answer**

We have to find the sum of the daily balances.

Now we have the balances along with the length from the given credit card statement as

1 day at $978.00

8 days at $978.00+$676.00=$1,654

4 days at $1,654+721.80=$2,375.80

8 days at $2,375.80+$93.15=$2,468.95

3 days at $2,468.95−$1,340.00=$1,128.95

3 days at$1,128.95+$115.75=$1,244.70

3 days at$1,244.70+$450.95=$1,695.65

As we know the sum of the daily balances is the product of the number of days with the current balance so we have it as

1×$978.00+8×$1,654+4×$2,375.80+8×$2,468.95+3×$1,128.95+3×$1,244.70+3×$1,695.65

=$55,672.70

So we have the sum of balances as $55,672.70

Hence we have the sum of balances as $55,672.70

**Page 215 Exercise 13 Answer**

We have to find the average daily balance of the given credit card statement.

Now from the previous question we have got the sum of daily balances as $55,672.70

And we have the n number of days as 30 As we know the formula for the average balance is the sum of daily balances divided by the number of days so we have it as

$55,672.70/30

≈$1,855.76

So we have the average daily balance as $1,855.76

Hence we have the average daily balance for the given credit card statement as $1,855.76

**Page 215 Exercise 14 Answer**

We have to find the monthly periodic rate

We can find the monthly periodic rate at the bottom right corner under the section Monthly Periodic Rate of the credit card statement;

Here we have it as Monthly Periodic Rate =1.65%

Hence we have the Monthly Periodic Rate as 1.65%

**Page 215 Exercise 15 Answer**

We have to find the Finance Charge.

We already found the value of the Average daily amounts in one of the previous problems and we have it as $1,855.76

Also, we know the Monthly Percent Rate as 1.65%

Now we have the finance charge as nothing but the product of the average daily balances with the Monthly Periodic Rate which is

$1,831.84×1.65%

=$1,855.76×0.0165

≈$30.62

So we have the Finance Charge as $30.62

Hence we have got the Finance Charge according to the Credit card statement as $30.62

**Page 215 Exercise 16 Answer**

We have to find the NEW BALANCE.

From the previous problems we have New Purchases =$2,057.65

Total payments =$1,340.00

Finance charge $30.62

We could find the Previous balance in the credit card statement underneath the summary statement and we have it as Previous balance =$978.00

similarly, the last charge can be found in the summary section of the credit card statement which is

Late charge =$0.00

Now we have the new balance the previous balance increased by the new purchase, late charge and finance charge and decreased by the payments and it is

$978.00+$2,057.55−$1,340.00+$0.00+$30.62=$1,726.17

So we have the new balance as $1,726.17

Hence we have the NEW BALANCE as $1,726.17

**Page 215 Exercise 17 Answer**

We have to find the value of AVAILABLE CREDIT.

From the privious problem, we have a new balance of $1,726.17

We can find the total credit line at the left side bottom of the credit card statement and here we have it as

Total credit line =$3,000.00

Now we have the available credit is the difference between the total credit line and the new balance that is $3,000.00−$1,726.17=$1,273.83

So we have the available credit as $1,273.83

Hence we have the AVAILABLE CREDIT from the given credit card statement as $1,273.83