8.1 Single Payment Loan Single-Payment Loan Promissory Note Vocabulary Single-Payment Loan Promissory Note Maturity Value Term Ordinary Interest Exact Interest

8.1 Single Payment Loan Formulas

8.1 Single Payment Loan Anita’s bank granted her a single-payment loan of $7,200 for 91 days at 12 % ordinary interest. What is the maturity value of the loan? Step 1: Find the ordinary interest owed. Step 2: Find the maturity value.

8.1 Single-Payment Loan Suppose Anita’s bank granted her a single-payment loan of $7,200 for 91 days at 12% exact interest. What is the maturity value of the loan? Step 1: Find the EXACT interest owed. Step 2: Find the maturity value.

8.1 Single-Payment Loans Single-payment loan of $6,425. Interest rate of 7%. Days of ordinary interest: 180 days. What is the interest owed? What is the maturity value?

8-2 Installment Loans Vocabulary Formulas Installment Loan Down payment Amount financed Formulas

8-2 Installment Loans Taksheka is buying a new refrigerator for $1,399. She made a down payment of $199 and financed the remainder. How much did she finance? Step 1: find the amount financed.

8-2 installment Loans 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% down payment? Step 1: Find the 20% down payment. Step 2: Find the amount financed.

8-2 Installment Loans You want to buy a digital camera that sots $1,099; however, you only have $200. You could use the $200 as a down payment and finance the remaining amount through the store’s credit department. What amount must you finance?

8.3 Simple Interest Installment Loans Vocabulary Simple Interest Installment Loans Annual percentage rate Formulas (P. 799)

8.3 Simple Interest Installment Loans Clara obtained an installment loan of $1,800 to purchase some new furniture. The annual percentage rate is 8%. She must repay the loan in 18 months. What is the finance charge? Step 1: Find the monthly payment. (Refer to the Monthly Payment on a Simple Interest Installment Loan of $100 table P.799) Step 2: Find the total amount repaid. Step 3: Find the finance charge.

8.3 Simple Interest Installment Loans Tuilo and Lupe are purchasing a side-by-side refrigerator with an installment loan that has an APR of 12%. The refrigerator sells for $1,399.99. The store financing requires a 10% down payment and 12 monthly payments. What is the finance charge? Step 1: Find the amount financed. Step 2: Find the monthly payment. (Refer to the Monthly Payment on the table on P.799) Step 3: Find the total amount repaid. Step 4: Find the finance charge.

8.3 Simple Interest Installment Loans Suppose you want to borrow $5,000 to buy a used car. Your bank will give you an installment loan of $5,000 for 2 years at 10% interest annually. Your monthly payments would be $230.50 for 24 months. What is the total amount of money you would have repaid at the end of 2 years if you accept the loan? $5,532

8.3 Simple Interest Installment Loans Installment loan to buy a new piano for $3,500. Plan of 18 monthly payments, with an APR of 8%. What are the monthly payments? What is the finance charge? $206.85 $223.30

8-4 Installment Loans- Allocation of Monthly Payment Vocabulary Repayment Schedule Formulas Important Question What Formulas Do I Use??? What’s the formula for interest? How do I find the payment to principal? How do I find the new principal?

8-4 Installment Loans- Allocation of Monthly Payment Stephanie and Donald obtained the loan of $1,800 at 8% for 6 months shown in the repayment schedule 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? Step 1: Find the interest: Step 2: Find the payment to principal. Step 3: Find the new principal.

8-4 Installment Loans- Allocation of Monthly Payment Isabel obtained a home improvement loan for $11,000 at 9% for 48 months. The monthly payment is $273.90. How much of the first monthly payment is interest? How much of the first of the first monthly payment is for principal? What is the new balance?

8-5 Paying off Simple Interest Installment Loans Vocabulary Final Payment Formulas

8-5 Paying off Simple Interest Installment Loans The first 3 months of the repayment schedule for Doug and Donna Collins’s loan of $1,800 at 12% interest for 6 months is shown in Figure 8.2. What is the final payment if they pay the loan off with the fourth payment? Step 1: Find the previous balance Step 2: Find the interest for the fourth month. Step 3 find the final payment.

8-5 Paying off Simple Interest Installment Loans How much would the Collins's in Example 1 save by paying off the loan early? Step: Find the interest saved. Total Payback – (Sum of Previous Payments + Final Payment)

8-5 Paying off Simple Interest Installment Loans You have simple interest installment loan for $1,400 at 10% for 6 months. After 3 payments, you owe a balance of $708.55. You decide to pay off the loan early when you make your fourth payment. Your final payment is the balance you still owe plus the fourth month’s interest of $5.90. What is the final payment?

8-6 Determining the APR Vocabulary No new words Table Formulas

8-6 Determining the APR Paul obtained an installment loan of $1,500 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? Step 1: Find the finance charge per $100. Step 2: Find the APR. (Refer to Figure 8.3, the Annual Percentage Rate for Monthly Payment Plans table on Page 300.)

8-6 Determining the APR A 54-inch HDTV is for sale for $1,899.92 cash or $166.10 per month for 12 months. What is the APR? Step 1: Find the finance charge. Step 2: find the finance chare per $100. Step 3: Find the APR.

8-6 Determining the APR Installment loan of $5,000. Finance charge of $580. Monthly payments: 24. What is the APR? Installment loan of $7,200. Finance charge of $1,008 Monthly payments: 36 What is the APR?