Chapter 8 Section 2 & 3 NAME: ______
Chapter 8 Section 2
Define the following:
1. Installment Loan:
2. Down Payment:
a. How is it calculated? (formula)
3. Amount Financed:
a. How is it calculated? (formula)
4. What are some things that you might take out an installment loan for?
Complete the following examples:
5. Tim goes to the store to buy a new plasma TV. The TV costs $2100. He can’t afford all of that right now, so he decides to make a down payment and finance the rest. He makes a down payment of $250, and finances the rest. How much does he finance?
6. Rebecca wants to buy a washer and dryer for $1400. She is using the store’s payment plan which says that she needs to put 30% down.
a. What is her down payment?
b. What is the amount she financed?
7. Find the amount financed on the following:
a. Computer selling at $2,499.99 b. Car selling at $23,740
Down payment of $299.99 Down payment of $2,229
8. Find the amount financed on the following:
a. King size bed selling at $899.95 b. TV selling at $760
20% down payment 15% down payment
Turn to page 289 in the book and complete #12, 14, 15 – 18.
Chapter 8 Section 3
Define the following:
9. Simple Interest Installment Loan
10. Annual Percentage Rate (APR):
Answer the following:
11. How do we calculate the following:
a. Monthly Payment = ON COMPUTER!
Google: Bankrate + loan calculator
b. Total Amount Repaid
c. Finance Charge
http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx?loanAmount=5000.00&years=5.00&terms=60&interestRate=4.50&loanStartDate=05%2F30%2F2014&monthlyPayments=93.22&monthlyAdditionalAmount=0&yearlyAdditionalAmount=0&yearlyPaymentMonth=+May+&oneTimeAdditionalPayment=0&oneTimeAdditionalPaymentInMY=+Jun+2014&pDate=May+30%2C+2019&show=true
Complete the following examples:
12. Claire obtains an installment loan of $2,200 to buy some new furniture. The annual percentage rate is 8%. She has 18 months to repay the loan.
a. Is there a down payment?
b. So, what is the amount financed?
c. What is the monthly payment?
d. What is the total amount repaid?
Total Amount Repaid = (number of payments) x (monthly payment)
e. What is the finance charge?
Finance Charge = total amount repaid - amount financed
13. Jennifer wants to take out a loan for $1,600 at and APR of 5.5% for 24 months. The company requires a 5% down payment. Find the following:
a. Down payment
b. Amount financed
c. Monthly payment
d. Total amount repaid
e. Finance charge
14. Theo is purchasing appliances for his house. He gets an installment loan with an APR of 12%. The total cost of the appliances is $3200. The store requires a 10% down payment and 12 monthly payments. Find the following:
a. Down payment
b. Amount Financed
c. Monthly Payment
d. Total Amount Repaid
e. Finance Charge
15. Matthew is purchasing a car. The car costs $25,487. He decides to put down $8,000 from his savings account. The dealership offers him an installment loan with an APR of 3.5%, over 4 years. Find the following:
a. Down payment
b. Amount Financed
c. Monthly Payment
d. Total Amount Repaid
e. Finance Charge