1. Interest Rates & Loans
Borrowing money intelligently

2. Lessons of Subprime Mortgages
Know the details of each loan!
Subprime borrowers did not….
No down payment , Borrowers had poor credit history
initial low interest rates (teaser rates)
Interest rates were “adjustable”
Interest Rates increased rapidly in
led to rapidly rising monthly payments in the future

3. $1.50
Trillion (2019)
Debt Slave

4. Key Details of Loan Bank
Interest rates are the cost of borrowing money (or benefit of saving it!)
Terms of a Loan:
Fixed or Floating interest rates
Repayment periods (1-30 years)
Accrued Interest period
$5,000 Principle Payment
You borrow $5,000
Bank
+ Interest Payments
$5,000
Total Loan Payment = Principal Payment + Interest Payments

5. Amortization Schedule:
how the principle of a loan is “paid down” over time
Monthly payment = principal payment + interest payment
$506.69

6. Interest Rate Worksheet