Understanding Loans and Their Types

Front

What is a loan?

Back

A loan is a sum of money borrowed from a lender that is expected to be paid back with interest.

Front

What is compound interest?

Back

Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods.

Tags

CCSS.7.RP.A.3

Front

What is a mortgage?

Back

A mortgage is a type of loan specifically used to purchase real estate, where the property serves as collateral.

Tags

CCSS.RI.11-12.3

CCSS.RI.11-12.5

CCSS.RI.8.3

CCSS.RI.9-10.3

CCSS.RI.9-10.5

Front

What factors can affect a loan's interest rate?

Back

Factors include credit score, loan amount, loan term, and market conditions.

Front

What is a cash loan?

Back

A cash loan is a type of loan that is received by the borrower in cash.

Tags

CCSS.RI.11-12.3

CCSS.RI.11-12.5

CCSS.RI.8.3

CCSS.RI.9-10.3

CCSS.RI.9-10.5

Front

How is simple interest calculated?

Back

Simple interest is calculated using the formula: Interest = Principal x Rate x Time.

Tags

CCSS.7.RP.A.3

Front

What is the formula for calculating compound interest?

Back

Compound Interest = Principal x (1 + Rate/Number of Compounding Periods)^(Number of Compounding Periods x Time) - Principal.

Front

What is a credit score?

Back

A credit score is a numerical representation of a borrower's creditworthiness, based on their credit history.

Front

What is predatory lending?

Back

Predatory lending refers to unfair, deceptive, or fraudulent practices by lenders during the loan process.

Tags

CCSS.RL.5.6

Front

What is the difference between secured and unsecured loans?

Back

Secured loans are backed by collateral, while unsecured loans are not and are based solely on the borrower's creditworthiness.