A saver deposits $1,200.00 at 3.0% simple interest for 2 years. How much interest is earned?
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A borrower owes $18,000.00 with 36 payments left at 9.0% APR. A new loan keeps the same term at 6.2% APR and finances a $500.00 fee into the balance. Assume both rates stay fixed and there is no prepayment charge.
Find the current monthly payment.
Find the refinanced monthly payment after adding the fee to the new balance.
Find the monthly savings and the total savings over the remaining term.
Choose the lower-cost option under these assumptions and name one assumption that could change the choice.
This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.