Interest Calc,Loan Amortization, Financial Literacy Review

Front

What is the relationship between credit score and interest rate when borrowing money?

Back

A higher credit score typically results in a lower interest rate (APR) when borrowing money.

Front

If a home is priced at $82,000 and a down payment of 10% is required, what is the loan amount?

Back

The loan amount is $73,800.

Front

What is a down payment?

Back

A down payment is a fixed amount of money, or a percentage of the selling price, that is paid upfront to reduce the cost of purchasing an item, such as a vehicle.

Front

How many payments are typically made on a 30-year mortgage?

Back

360 payments.

Front

What is the formula for simple interest?

Back

i = p • r • t, where i is interest, p is principal, r is rate, and t is time.

Front

Which investment option will yield the fastest money for a sofa costing $1,775 if the person has $1,550 in savings?

Back

A 3 month investment at 10% simple interest.

Front

What does APR stand for in financial terms?

Back

APR stands for Annual Percentage Rate, which is the annual rate charged for borrowing or earned through an investment.

Front

What is loan amortization?

Back

Loan amortization is the process of paying off a debt over time through regular payments that cover both principal and interest.

Front

What is the impact of a higher interest rate on loan payments?

Back

A higher interest rate increases the total amount paid over the life of the loan and raises the monthly payment.

Front

What is the purpose of a credit history?

Back

A credit history provides lenders with information about a borrower's past borrowing and repayment behavior, influencing their creditworthiness.