# Apr Loan Payment Formula - DOC

Document Sample

```					                       Fill-in-the-Blank Notes
Chapter 8- Loans
Section 8-1: Single-Payment Loans

1) A single-payment loan is a loan that you ________ with _____ _______________

after a specified period of time.

2) A promissory note is a type of ___________________ ______ . It is a

___________ promise to ______ a certain sum of money on a certain date in the

future.

3) The ___________ _________ of the loan is the __________ ___________ you

must repay. It includes both the ____________ and the ___________ owed.

4) The term of the loan is the amount of ______ for which the loan is granted.

5) When a term is a certain number of days, the lending agency may calculate

interest in one of two ways:

     _____________ ____________ is calculated by basing the ________ of

the loan on a _______-day year.

     __________ _____________ is calculated by basing the ________ of the

loan on a _______-day year.

6) The formula for Interest is:

7) The formula for Ordinary Interest is:

8) The formula for Exact Interest is:

9) The formula for Maturity Value is:

10) Copy down the work and answers for Example 1: Anita Sloane’s bank granted her

a single-payment loan of \$72,000 for 91 days at 12 percent ordinary interest.

What is the maturity value of the loan?
Fill-in-the-Blank Notes
Chapter 8- Loans
11) Copy down the work and answers for Example 1: Anita Sloane’s bank granted her

a single-payment loan of \$72,000 for 91 days at 12 percent exact interest. What is

the maturity value of the loan?

Section 8-2: Installment Loans

1) An installment loan is a loan that you ________ in _____________ equal

____________ over a specified ______________ of ________.

2) The _________ ______________ is a portion of the _______ _________ of the

3) The ___________ ________________ is the portion of the ________ ________

that you ________ after making the down payment.

4) The formula for Amount Financed is:

5) The formula for Down Payment is:

6) Copy down the work and answers for Example 1: Tasheka Quintero is buying a

new refrigerator for \$1,399. Quintero made a down payment of \$199 and financed

the remainder. How much did Quintero finance?

7) Example 2: Rebecca Clay purchased a washer and a dryer for \$1,140. She used

the store’s installment credit plan to pay for the items. She made a down payment

and financed the remaining amount. What amount did she finance if she made a

20 percent down payment?
Fill-in-the-Blank Notes
Chapter 8- Loans
Section 8-3: Simple Interest Installment Loans

1) When you obtain a simple interest installment loan, you must pay

______________ __________ for the use of the money.

2) You ________ the loan with ___________ ____________ _________________,

where part of each payment is used to pay the _______________ on the

___________ ______________ of the loan.

3) And the remaining part of the payment is used to _________ the

______________.

4) The amount of monthly ______________ depends on the ___________

____________, the ______________ of ________________, and the

_____________ ____________ _______.

5) The _____________ ____________ _______ is an index showing the relative

cost of borrowing money.

6) The formula for Monthly Payment is:

7) The formula for Total Amount Repaid is:

8) The formula for Finance Charge is:

9) Copy down the work and answers for Example 1: Carla Hunt obtained an

installment loan of \$1,800.00 to purchase some new furniture. The annual

percentage rate is 8 percent. She must repay the loan in 18 months. What is the

finance charge?
Fill-in-the-Blank Notes
Chapter 8- Loans
10) Example 2: Tulio and Lupe Fernandez purchase a refrigerator with an installment

loan that has an APR of 12 percent. The refrigerator sells for \$1,399.99. The store

financing requires a 10 percent down payment and 12 monthly payments. What is

the finance charge?

Section 8-4: Installment Loans-Allocation of Monthly Payment

1) The interest is calculated each month using the __________ __________ formula.

2) The amount of ______________ that you owe ____________ with each

___________ _______________.

3) A ________________ ________________ shows the distribution of interest and

principal over the life of the loan.

4) The formula for Interest is:

5) The formula for Payment to Principal is:

6) The formula for New Principal is:

7) Copy down the work and answers for Example 1: The Coles obtained the loan of

\$1,800 at 8 percent for 6 months shown in Figure 8.1. Show the calculation for

the first payment.

What is the interest?

What is the payment to principal?

What is the new principal?
Fill-in-the-Blank Notes
Chapter 8- Loans
8) Example 2: Carol Blanco obtained a loan of \$6,000 at 8 percent for 36 months. The

monthly payment is \$187.80. The balance of the loan after 20 payments is \$2,849.08.

What is the interest for the first payment?

What is the interest for the 21st payment?

Why is the interest so different for the two payments?

Section 8-5: Paying Off Simple Interest Installment Loans

1) If you pay off a simple interest installment loan before the end of the term, you

just _____ the _______________ _____________ plus the current month’s

____________. This is the _________ _____________.

2) The formula for Interest is:

3) The formula for Final Payment is:

4) The formula for Interest Saved is:

5) Copy down the work and answers for Example 1: The first 3 months of the

repayment schedule for Doug and Donna Collins’s loan of \$1,800 at 12 percent

interest for 6 months is shown in Figure 8.2 below. What is the final payment if

they pay the loan off with the fourth payment? See book!
Fill-in-the-Blank Notes
Chapter 8- Loans
6) Copy down the work and answers for Example 2: How much would the Collins

in Example 1 save by paying off the loan early?

Section 8-6: Determining the APR

1) If you know the ___________ of ____________ ________________ and the

__________ __________ per \$100 of the amount you financed, you can use a

_________ to find the ______________ ______________ ______(APR) of the

loan.

2) You can use the APR of loans to ___________ the relative ________ of

borrowing money.

3) The formula for Finance Charge per \$100 is:

(Note- If finance charge is not given, refer to section 8-2/3 for formulas!)

4) Copy down the work and answers for Example 1: Paul Norris obtained an

installment loan of \$1,500.00 to pay for a computer. The finance charge is

\$146.25. He agreed to repay the loan in 18 monthly payments. What is the annual

percentage rate?

5) A 54-inch HDTV is for sale for \$1,899.92 cash or \$177.83 per month for 12

months. What is the APR?

```
DOCUMENT INFO
Shared By:
Categories:
Stats:
 views: 146 posted: 1/12/2011 language: English pages: 6
Description: Apr Loan Payment Formula document sample
How are you planning on using Docstoc?