Promissory Notes
A way to find interest that uses a 365-day year.
What is the exact interest method?
The simple interest formula.
What is I = PRT?
Part of the purchase price of an item that is paid at the time you take out a loan.
What is down payment?
A fee charged if you pay off a loan early.
What is a pre-payment penalty?
What APR stands for.
What is Annual Percentage Rate?
A way to find interest that uses a 360-day year; also called the banker's interest method.
What is the ordinary interest method?
The daily interest factor for $600 borrowed at 18% exact interest. (Round to 4 decimal places)
What is $0.2959? ($600 x .18/365)
How often you usually make payments on an installment loan.
What is monthly?
Credit scores affect your APR. Scores generally range between 300 and ?
What is 850?
Rosa borrows $1,000 @ 6% exact interest for 85 days. How much interest does she pay?
What is $13.97? ($1,000 x .06 x 85/365)
What is the daily interest factor?
The installment price is higher than the cash price because the seller add this to the cash price.
What is a finance charge?
(= installment price - cash price)
You have a 12-month, $2,000 simple interest loan at 9% interest. You repay the loan in full with the 6th payment when your balance is $1,188.40. What was the amount of your final payment?
What is $1,197.31? ($1,188.40 x .09 x 1/12 = $8.91; $1,188.40 + $8.91 = $1,197.31)
The amount borrowed on a promissory note.
What is the principal? (or face amount)
Find the ordinary interest from March 3 - 15 on $1,000 at 15% interest.
What is $5.00? ($1,000 x .15/365 = $0.4167)
($0.4167 x 12 days = $5.00)
You buy a new purse for $25 down and a total installment price of $297.34. You pay $30.26 monthly. It will take you how many months to pay off this loan?
What is 9 months? ($297.34 - $25 = $275.34; $275.34/$30.26 = 9)
Defaulting on your mortgage loan can lead to this.
What is foreclosure?
You pay $450 in interest on a 3-month note for a $12,000 loan. What is the rate of interest you paid?
(Rate of Interest = 1 years interest / principal amount)
What is 15%?
$450 x 4 = $1800 interest for 1 year
$1,800/$12,000 = 0.15 = 15%
Find the interest on $725 @ 11% for 2 months.
What is $13.29? (I=PRT: $725 x .11 x 2/12)
A computer costs $1200. You buy it on an installment loan by putting $100 down and making payments of $38 a month for 36 months. Find the finance charge.
What is $268? ($38 x 36 = $1,368 + $100 down = $1,468 installment price)
($1,468 - $1,200 cash price = $268)
You borrow $10,500 at 8.5% for 5 years. Your monthly payment is $215.42. You did not pay off the loan early. How much did you pay back to the lender?
What is $12,925.20? ($215.42 x 60 months)
Requires the lender to tell the borrower what the APR is charged on the loan.
What is the Truth in Lending Act?