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Chapter 5
 You have an account at Bank A. Your last balance statement shows an ending balance of $750. This month you deposit $350 in your account and withdrew $250. The you write 3 checks, two of which clears. The two checks that have cleared totals $80. The last remaining check total $70. You pay a $7 fee to your bank that month. What is the adjusted bank balance (accounting for the unclear checks as well)? Show work.
 Using the chart below. You want to open a checking account with a $500 deposit. You will make other deposits throughout the month, totally another $500 additional. You believe that that you will write 17 checks per month, totaling $650 all together. You will use other bank’s ATMs 4 times a month. You will withdraw $350 from the other ATM every time. You will not be able to maintain a minimum balance in any account. Which bank should you choose? Show work.
Hillsboro bank  First bank  South trust Bank  Sun Coast Bank  
ATM Charges  
Home bank:  Free  Free  Free  Free  
Using Other bank Atm:  $ 4 each  5% transaction fee  $4.50  $3 each  
Checking:  
minimum deposit  $100  $50  $50  $200  
Minimum balance  $50  $150  $200  $150  
Monthly fees  $20  $15  $5  $10  
Checkwriting charges  $0.50 each  $1.50 each  $2.50 each  $2 each  
Overdraft fee  $35 per incident  $30 per incident  $28 per incident  $35 per incident  


 You have $1, 300 to invest in a Certificate of Deposit. The local bank offers 3.5% (per year) for a 36 month FDIC insured CD. A nonfinancial institution offers 8% (per year) on a 36 month investment. What is the risk premium (in percentage) and what does it mean? Show work.
Chapter 6
 You are depositing $4500 in a 5 year CD that pays 5% interest. How much interest will you accrue if you hold the CD until maturity? Show work.
 You have invested $1,000 in a 36 month CD that pays 2.25%. How much interest will you receive at maturity? Show Work.
 You have $30,000 excess cash to invest after you fully funded your emergency fund. A 20,000 Tbill can be purchased (maturing to value at $30,000 after one year), or you can buy three –$9500 CD that can be purchased with a guaranteed 6% return after 12 months. Which will give a better return (in percentages)? Show work.
 You purchase a $10,000 Tbill for $7,000. A few months later you sold the Tbill for $8,500. What was the return on the tbill? Show work.
Chapter 7—ASSESSING AND SECURING YOUR CREDIT
 With the recent hacking of Equifax, identity theft is on the rise. It is more important than ever to make sure that you constantly monitor your accounts for any suspicious charges or changes to your accounts. Every bank, credit card company or financial institution report to at least one of the 3 credit bureaus. What is the time limit and liability, if you are a victim of:
a) banking fraud?
b) Credit fraud?  You decided to go and apply for a credit card at your local financial institution. The Prime rate currently announced was 4.5%. You have an excellent credit history and FICO score. You were offered 16.99% interest rate for a card. How is each interest rate, which you and other borrowers receive from a lender or credit company, determined by the creditors?
 You have a few credit cards that you are currently paying the minimum payment on. Recently you receive a 0% balance transfer. Explain the advantage and the pitfalls of balance transfers (0% APR offers for a limited time)? What do you need to watch out for?
Chapter 8
 A is offered a credit card (CARD A) that has an APR of 21.99%. B is offered a card (CARD B) that has 12.99% but charges $99 annually. They both plan to carry a balance forward of about $1000 each month. Which person is offered a better card? Show work.
 Your credit cards closed on the 15th of every month, your payments are due on the 1st. You have an APR of 14.99%.
a) If you made a purchase for a new computer for $2700 on March 16^{th}, how many interest free days will you have left?
b) When will you have to pay for the tv in full in order to avoid finance charges? (Exact day of the exact month.)
c) If you can pay only $50 per month, how long would it take for you to pay it off and how much interest would you end up paying for the computer? ( You can use an online calculator on Bankrate.com or another online site)  You currently have a credit card that charges 22.99% interest. You usually carry a balance of $100. You receive an offer for a new credit card with a teaser rate of 9.99% for the first 6 month…after that the rate goes up to 24.99%.
a) What is the total annual interest on the current credit card?
b) What will be the interest in the first year after you switch?
C) Should you switch? why?
 You have a credit card that charges 19.99% on outstanding balances and 25% on cash advances plus a fee of 1% of the cash advance. The closing date on the credit card is the first of each month. Last month you left a balance of $1500 on your credit card. This month you took out a cash advance of $750 and made $1700 in additional purchases. You made a payment of $1800. What will the total of your new balance be on your next credit card statement, taking into account finance charges?
Chapter 9
 Cersei Lannister needs to borrow $150,000 for the next year. Bank North will give her the loan at 19.5%. Bank South will give her the loan at 12% with a $550 loan origination fee. Bank East will give her the loan at 16% with no fees. Bank West will give her a loan at 9% but charges a $1500 loan origination fee. The loan is for 1 year.
 Determine the total interest and fees she will be charges in each case.
 B) Which loan should she chose?
 Little Finger has just borrowed $5,000 on a four year loan at 8% simple interest. Complete the Amortization table below for the first 5 month of the loan.
Payment Number  Beginning Balance  Payment amount  Applied to interest  Applied to Principal  New Balance 
1  $5,000  $122  $33.33  $88.67  $4,911.33 
2  A  $122  32.74  B  4,822.07 
3  4,822  c  d  89.85  4,732.22 
4  4,732.22  $122  e  90.45  F 
5  4,641.77  $122  30.95  G  H 
 Determine the cost of a Payday loan. Homer Simpson had a rough few months. He fell behind on his mortgage and is living paycheck to paycheck. He anticipates another mortgage payment of $2300 coming up very soon at the beginning of April and does not have the liquidity to pay it before his next paycheck on April 7th. He tries a payday loan that is run by Burns Corp on April 1st. The payday loan charges him a fee of $345 for his $2300 advance on his pay. He pays off his $2300 mortgage on April 2^{th} with the payday loan. He gets paid $2300 on April 7^{th,} but another bill comes up! Bart broke his arm skate boarding and the hospital bill of $2300 is due April 9th. Homer must now delay repayment to the Burns Corp. for the payday loan. They charge him another $325 to delay repayment another pay period (2 weeks). He pays off Bart’s hospital bill with his next paycheck (April 21^{st}), but now his monthly taxes, credit cards and utilities of $2300 are due (April 23^{rd}). He defers the payday loan for another pay period (to May 5^{th}). They charge him another $325 to delay repayment for another 2 weeks. He gets paid and pays his credit card and utility bills, but then Marge has an accident with the family car, and they need to have it fixed! He defers repayment to Burns Corp. for payday loan again. They charge him another $325 to delay repayment. He finally gets his tax return check of $4000 and repays the payday loan.
a) How much money does he pay to Burns Corp. for the Payday loans?
b) How much interest would he have paid if he used his credit card with a 24.99% APR instead of a payday loan.  You are borrowing $25,000 on a 5 year, 4.5% addon interest loan. What will your payments be?
 Ned Flanders wants to purchase a new car for $50,000. He has no savings, so he needs to finance the entire purchase amount. With no down payment, the interest rate on the loan is 7% and the maturity of the loan is 6 years. His monthly payments will be $903.33. He earns $850.00 a month. He has a credit card limit of $10,000 and an interest rate of 25%. If he uses all of his monthly earnings to make the monthly payments on the car:
a) how much will he add each month to his credit card balance if he uses it to finance the remainder of the car?
 b) What will the finance charges are on his credit card for the first 2 months that finance charges apply? (Assuming he makes no payments towards his credit card).
 You graduated from college a year ago and forgot to pay one of your student loans. Now it is in default and you are being contacted by a collections agency. It is a private loan. What do you do? How do you fix it?
Chapter 10
 HOME PRICE OFFER. Rey is ready to make an offer on a 3000 sq. ft. home that is priced at $415,000. She investigates other homes on Lots of similar sizes, within the same neighborhood. A 3,200 square foot home that sold for $450,000. A 2850 square foot home that sold for $380,000. A 3800 square foot house that sold for $500,000. What should she offer on the home?
 CLOSING COST. How much would you have to pay at closing if you took out a mortgage loan for $350,000 and did not put a down payment of 20%, but instead put down 10%…which means that you will need to pay an origination fee of 1% and PMI of 1.0% on the total loan amount. Other fees include $100 loan application fee and $320 appraisal fee, $550 for title search and insurance, $500 attorney fee. (How much will you need at closing including the down payment?)
 TOTAL INTEREST PAID. You are considering purchasing a home that requires $400,000 mortgage at 4.25%. The payment on the 30 year mortgage for this amount is $1968.34 per month, the payment for a 15 year maturity is $3009.57 per month.
 A) What is the total amount that you would pay for the 30 year mortgage, including interest?
B) What is the total amount that you would pay for the 15 year mortgage, including interest?
C) What is the difference in the total interest paid between the two different maturities?
 TAX SAVINGS. If the rent on an apartment is $2100 per month, which is equal to a mortgage payment on a house, how much additional tax savings will you realize if $900 of the monthly mortgage payment is interest and your tax bracket is 22 percent?
 If a current mortgage payment of $1970 per month can be reduced to $1250 per month by refinancing, how many months would you need to remain in the house to recoup refinancing charges of $6,300? (Round up to the nearest month.)