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Financial Algebra © Cengage/South-Western Slide 1 4-1 INTRODUCTION TO CONSUMER CREDIT Become familiar with the basic vocabulary of credit terms. Become familiar with types of lending institutions. Compute finance charges for installment purchases. OBJECTIVES
Financial Algebra © Cengage Learning/South-Western Slide 2 credit debtor creditor asset earning power credit rating credit reporting agency FICO score installment plan down payment interest finance charge Key Terms
Financial Algebra © Cengage Learning/South-Western Slide 3 Example 1 Heather wants to purchase an electric guitar. The price of the guitar with tax is $2,240. If she can save $90 per month, how long will it take her to save up for the guitar?
Financial Algebra © Cengage Learning/South-Western Slide 4 If Heather ’ s guitar costs x dollars and she could save y dollars per month, express algebraically the number of months it would take Heather to save for the guitar. CHECK YOUR UNDERSTANDING
Financial Algebra © Cengage Learning/South-Western Slide 5 Example 2 Heather, from Example 1, speaks to the salesperson at the music store who suggests that she buy the guitar on the installment plan. It requires a 15% down payment. The remainder, plus an additional finance charge, is paid back on a monthly basis for the next two years. The monthly payment is $88.75. What is the finance charge?
Financial Algebra © Cengage Learning/South-Western Slide 6 EXAMPLE 3 Carpet King is trying to increase sales, and it has instituted a new promotion. All purchases can be paid on the installment plan with no interest, as long as the total is paid in full within six months. There is a $20 minimum monthly payment required. If the Schuster family buys carpeting for $2,134 and makes only the minimum payment for five months, how much will they have to pay in the sixth month?
Financial Algebra © Cengage Learning/South-Western Slide 7 The Whittendale family purchases a new refrigerator on a no-interest-for-one-year plan. The cost is $1,385. There is no down payment. If they make a monthly payment of x dollars until the last month, express their last month ’ s payment algebraically. CHECK YOUR UNDERSTANDING
Financial Algebra © Cengage/South-Western Slide INTRODUCTION TO CONSUMER CREDIT Become familiar with the basic vocabulary of credit terms. Become.
CH 4: CONSUMER CREDIT 4.1 Introduction to Consumer Credit.
Consumer Credit Chapter 4. Live within your income, even if you have to borrow money to do so. - Josh Billings.
Introduction II. Example – Credit Ratings Mike has a credit rating of 720. Tyler has a credit rating of 560. Mike and Taylor apply for identical loans.
Chapter 7 Buying Decisions. Slide 2 Where Can Consumers Get Credit? Credit is the ability to borrow money and pay it back later. 7-2 Getting Started with.
Financial Algebra © Cengage/South-Western Slide 1 CONSUMER CREDIT 4-1Introduction to Consumer Credit 4-2Loans 4-3Loan Calculations and Regression 4-4Credit.
Review for quiz tomorrow Consumer Credit. What we covered: Saving & Rounding Finding a down payment Layaway Plans Finding the finance charge (interest)
Financial Algebra © Cengage/South-Western Slide CREDIT CARDS Become familiar with the basic vocabulary of credit cards. Compute an average daily.
Consumer Math p Definitions Down payment – part of the price paid at the time of purchase Financed – borrowed Mortgage – a property loan.
Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide EXPLORE COMPOUND INTEREST Understand the concept of getting interest on your.
Thinking Mathematically Consumer Mathematics and Financial Management 8.5 Installment Buying.
Financial Algebra © Cengage/South-Western Slide CREDIT CARD STATEMENT To identify and use the various entries in a credit card statement. OBJECTIVES.
Credit Fundamentals Chapter Using Credit Two parties involved: 1.Debtor – Anyone who buys on credit or receives a loan 2.Creditor – The one who.
Financial Algebra © Cengage/South-Western Slide LOANS Read monthly payments from a table. Compute monthly payments using a formula. Compute finance.
Financial Algebra © 2011 Cengage Learning. All Rights Reserved Slide STOCK TRANSACTION FEES Compute the fees involved in buying and selling stocks.
Back to Table of Contents pp Chapter 25 What Is Credit?
Credit is the privilege of using someone else’s money for a period of time and is accepted as a substitute for cash Creditor is any person/ business that.
Financial Algebra © Cengage/South-Western Slide PAY PERIODS AND HOURLY RATES Compute weekly, semimonthly, and biweekly earnings given annual salary.
Chapter 7 Buying Decisions. Slide 2 How Can You Be a Responsible Shopper? 7-1 Designing a Buying Plan Use systematic decision making: consider all the.
Lesson 7-2 Getting Started with Credit Learning Objectives: - Compare the sources of credit - List and explain the benefits of credit.
Financial Algebra © Cengage/South-Western Slide SAVINGS ACCOUNTS Learn the basic vocabulary of savings accounts. Compute simple interest using the.
Types of Credit. Loans Borrowing a specific amount for a certain period of time.
Financial Algebra © Cengage/South-Western Slide AVERAGE DAILY BALANCE Calculate the average daily balance using the credit calendar. Calculate the.
ELISSA VERT 3 RD HOUR 02/25/15 Credit Cards – The Real Cost.
Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide CLASSIFIED ADS Compute the cost of classified ads for used cars. Compute the.
Financial Algebra © Cengage/South-Western Slide 1 BANKING SERVICES 3-4Explore Compound Interest 3-5Compound Interest Formula 3-6Continuous Compounding.
Chapter © 2010 South-Western, Cengage Learning Credit Records and Laws Establishing Good Credit Evaluating Credit and Laws 17.
Financial Algebra © Cengage/South-Western Slide CLASSIFIED ADS Compute the cost of classified ads for used cars. Compute the cost of sales tax on.
Installment Buying All for 3 easy payments of…. Installment Buying Pay for a portion of the purchase now Remaining balance owing is divided into equal.
UNIT FIVE. CREDIT: BUY NOW, PAY LATER. Coming soon to a mailbox near you: Credit Card offers.
Buy Now Pay Later…. How to analyze the advantages & disadvantages of consumer credit How to distinguish among various types of consumer credit How.
Chapter 6 Consumer Credit Section 6.1 What is consumer credit?
Chapter © 2010 South-Western, Cengage Learning Credit in America Credit: What and Why Types and Sources of Credit 16.
Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide SAVINGS ACCOUNTS Learn the basic vocabulary of savings accounts. Compute simple.
© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 18 SLIDE Credit Fundamentals Cost of Credit.
Credit 8.01 Evaluate various sources of credit available to the government, business, and consumers. T G3.
Chapter 4. What is Credit? ◦ Principal + Interest Installment Debt ◦ Equal Payments ◦ Durable Goods ◦ Longer Term = Lower Payment BUT ◦ More Interest.
Credit Study Notes By: Your Name. Debit Card Credit Card A promise to: Buy Now, Pay: Charges: Mastercard or:
Credit Cards. What are the benefits? No need to carry large sums of cash Helps credit rating Have access to a written record of all purchases Rewards.
Section 6.2 Notes. Can you afford a loan? First way to tell Second way to tell.
Chapter 25 What Is Credit? pp Introduction to Business, What Is Credit? If you need money quickly and the only way to get the amount you need.
Understand credit management 1. 2 What is credit? Credit is the privilege of using someone else’s money for a period of time. Who uses credit? ◦
the ability to borrow money in return for the promise of REPAYMENT Before using credit you should ask your self: Is it a want or a need? Do you.
The Basics of Credit Objective: To explain the concept of consumer credit, including major types and their benefits/drawbacks.
BUS250 Seminar 6. Key Terms Interest: an amount paid or earned for the use of money. Simple interest: interest earned when a loan or investment is repaid.
Business Mathematics Week 11 Using Math in Consumer Credit and Payroll MU123.
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