Basic Loans Lesson 14 SinglePayment Loans 14 a
Basic Loans Lesson 14
Single-Payment Loans 14 a
A single-payment loan is a loan that will be repaid all at the same time after a specific time period. A promissory note is a single-payment loan. It is a “promise” to repay the money by a certain date.
The maturity value is the amount of money the loan will be worth in the future. The term is the amount of time for which the loan was given.
Ordinary Interest; year. Interest based on 360 -day 360 Exact Interest; year. Interest based on a 365 -day 365
Formulas… Interest = Principal * Rate * Time Ordinary = Principal * Rate * Interest Exact = Principal * Rate * Interest Maturity = Principal + Interest Value
Suppose Barney was granted a single-payment loan of $8, 500 for 95 days at 12% ordinary interest rate. Find the maturity value of the loan. Find Ordinary Interest. Find Maturity Value.
Suppose Lily was granted a single-payment loan of $6, 300 for 75 days at 15% exact interest rate. Find the maturity value of the loan. Find Exact Interest. Find Maturity Value.
Installment Loans 14 b
An installment loan is a loan that is repaid in several equal payment over a time period. The down payment is part of the total amount that must be paid at the time of the purchase. The down payment will either be a set amount of money or a percentage of the total. The amount financed is the amount left after the down payment is made.
Formulas… Amount = Cash - Down Financed Price Payment Down = Amount * Payment Percent
Suppose Robin is buying a new big-screen TV for $1, 556. She made a down payment of $199. Find the amount financed. Amt. Financed = (Total) – (Down Payment)
Ted was buying a new furniture set for $5, 650. He made a down payment of 20%. Find the amount financed. Find Down Payment. Find Amount Financed.
Lesson 14: Basic Loans � Questions � Summarize � Homework ◦ Worksheets your notes
- Slides: 14