Let's say you have a 30-year $200,000 mortgage at an interest rate of 6.5 percent, giving you a monthly payment of $1,264. Your mortgage broker encourages you to make one extra mortgage payment each year to lower the principal faster. If you do that, which number will be larger: the total amount you'll save in interest over the life of the loan, or a winning lottery ticket worth $50,000?
Sally has a credit card debt of $10,000 at an interest rate of 17 percent annually. She’s been paying the minimum every month, but it’s taking forever to make a dent. What would be the best way to pay it off?
You are clothes shopping and comparing the sales at two competing stores. Clothes King is advertising "50 percent off all items in the store," and Thrifty Threads is promoting a "buy one, get one free" sale on everything in the store. Which deal will save you more money?
You want to buy a $20,000 car and only have $5,000 saved up for a down payment. The wily car dealer offers you two different options. Number one: Take the regular APR for 6.99 percent for a 60-month loan and get an instant cash rebate of $2,000. Number two: Take a lower APR of 3 percent but no cash rebate. Which deal will result in a lower monthly payment?
Credit card deals are notoriously hard to decipher, especially those offering cash back on every purchase. Which is the better deal: A card that gives you 1.5 percent cash back on all purchases, but charges a $100 annual fee, or a card with no annual fee, but zero cash back on every purchase?