Name: ___________________________

Date: ___________________________

Project 2 - Pretest/Posttest
You will be given 55 minutes to complete the assessment. You may use paper, pencil, and Microsoft
Excel. No other computer program, including the Internet, may be used.

Total Possible:
Your Score:

Section I
4

Section II
7

Section III
32

Total
56

Section I. Matching (4 points) You have 5 minutes to complete this section.

Directions:
For the problem below, match the letter with the correct number. Not all
letters or numbers will be used.

1.
t

3.
t

2.

4.

t
_______

A. Loan Interest Rate

_______

B. Loan Principal

_______

C. Savings Interest Rate

_______

D. Amoritization Table

_______

E. Loan Period

Section II. True/False (7 points) You have 10 minutes to complete this section.
T
F
1. Your monthly car payment should be no more than 15% of your monthly income.
T
F
2. Your monthly car payment should be at least 15% of your monthly income.
T
F
3. A loan with the lowest interest rate is the one that should always be chosen.
T
F
4. As the time increases, the interest that you pay on your loan increases and the
principal decreases.
T
F
5. As the time increases, the interest that you pay on your loan decreases and the
principal increases.
T
F
6. In order to calculate the range of a data set, you need to know the maximum and
minimum values.
T
F
7. Depreciation describes how the value of something decreases as time goes on.

Section III. Short Answers (32 points) You have 40 minutes to complete this section.

Loan 1

A. Direction:

Length of Loan

Rate

Price of Car

36 month

4.04

$29,311

Calculate the following problems. Use the data in the above table if appropriate. If
you are using Excel to do the calculation, write the exact Excel command you used.
Show all your work to receive full credit. (17 points)

1.

(5points) Calculate the monthly interest paid.

2.

(5 points) Calculate the total interest paid during the duration of the loan.

3.

(5 points) Calculate the total cost of the car at the end of the loan.

4.

(2 points) Calculate the percent of the original price that was paid in interest during the
duration of the loan.

B. Direction:

Short Answer. Make sure to use complete sentences and correct punctuation. 5
points each. (15 points)

1.

Explain how the interest and principal changes as time passes on a loan. Why is that?

2.

What does it mean to be upside down in your car payment? Why does that happen?

3.

Do you always want to go with the lowest interest loan rate, regardless of loan
length? Why or why not?