A&W MATH 11: PERSONAL LOANS, LINES OF CREDIT, AND …
A&W MATH 11: PERSONAL LOANS, LINES OF CREDIT, AND OVERDRAFTS
A) Vocabulary:
amortization period:
line of credit:
overdraft protection:
payday loan:
default:
ex: Jesse went to MoneyMart to borrow $500. He had to them back $580 after 14 days.
i) What is the annual interest rate for the loan?
ii) what is the daily interest for the loan?
ex: Jesse went to Cash Money to borrow $500 and paid it back with interest 7 days later. The interest rate was 350% per year. How much interest did he pay?
B) What is a personal loan?
-it is a line of credit. It can be secured (ex: borrow money against your house or company…get a lower interest rate) or unsecured line of credit (higher interest rate).
-to make calculations easier, sometimes they use a personal loan calculator (ie: pg 320 in workbook).
-the personal loan calculator is based on interest that is compounded.
ex: Kevin bought an Acura MDX for $65,000. He put a downpayment of $5000, and borrowed the rest at 3%. He hopes to pay it off after 4 years.
i) How much money does he need to borrow?
ii) What are his monthly payments over the 4 years?
iii) What is the total payment for the car?
pg 317 #1-5
-pg 321 #1, 2
-pg 323 #3
-pretest, corrections, test
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