How much will he save in interest choosing one loan

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Reference no: EM13212734

1. Roger needs approximately $4,500 for a new living room set. A 3 ½ -year secured loan through the furniture store is available for 15%. He has talked to his bank and can also get a loan from them. Based on his poor credit history, the bank is willing to loan him the $4,500 @ 13.5% for 5 years.

a. Using Appendix E, which loan should he choose?

b. What is the total interest that he will pay on the furniture store loan vs. the bank loan?

c. How much will he save in interest choosing one loan over the other loan?

2. Evelyn has been shopping for a home entertainment system. Being a graduate of Dr. Corman's Personal Finance class, she has determined that she can afford $200 in monthly payments over 2 years. If she can get an 8% annual rate of interest:

a. What is the approximate total price that she can pay for a home entertainment system?

b. If she puts down $400, what is the approximate total price she can pay for a home entertainment system?

Reference no: EM13212734

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