Unit 5

Front

How many days are there from June 24th to August 6th?

Back

43 days.

Front

What is a prepayment penalty in loans?

Back

A fee charged to a borrower for paying off a loan early.

Front

If a loan balance is $2,980.08 and the prepayment penalty is 6.7%, what is the total amount to pay off the loan?

Back

$3,179.75.

Front

How do you calculate the penalty fee for a loan?

Back

Multiply the loan balance by the prepayment penalty percentage.

Front

What is the formula to find the interest rate from the interest paid?

Back

Interest Rate = (Interest Paid / Principal) * (12 / Time in Months) * 100.

Front

Celina paid $650 interest on a loan of $12,250 for 7 months. What is the interest rate?

Back

9.1%.

Front

What is the total cost of an item if you pay a down payment and monthly installments?

Back

Total Cost = Down Payment + (Monthly Installment * Number of Months).

Front

If Mack pays $1,500 down and $438 monthly for 24 months for skis, what is the total installment price?

Back

$12,012.00.

Front

What does it mean to pay a loan off early?

Back

It means to pay the remaining balance of the loan before the due date.

Front

What is the significance of understanding prepayment penalties?

Back

It helps borrowers make informed decisions about paying off loans early.