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Commercial Account Manager

Real-Life Activities

Real-Life Math -- Solution

First, calculate how much the new loan will cost Bob for the year.

$250 x 12 = $3,000

Second, add up the yearly cost of the old loans and the new one.

$1,000 + $2,000 + $4,000 + $3,000 = $10,000

Finally, add the $2,000 the banker wants Bob to set aside.

Total Payments = $10,000 + $2,000 = $12,000

Bob's surplus will be $13,000, so Bob gets the loan.