Compare MPay & Interest, Loan Amortization, Financial Literacy

Front

What is a credit history?

Back

A formal and extensive record of how good an individual is at maintaining their credit and paying their current and past debts in a timely manner.

Front

How does a higher interest rate affect monthly payments?

Back

The higher interest rate you have, the higher your monthly payment will be.

Front

What is the formula to calculate the minimum monthly payment on a credit card?

Back

Minimum Monthly Payment = (Principal Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^-Number of Payments)

Front

If Andrew uses a credit card with a 34.99% APR to buy a $1209 hot water heater, what will his minimum monthly payment be if he wants to pay it off in 3 years?

Back

$54.68

Front

What is compound interest?

Back

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods.

Front

How much will Pedro have in his savings account after 3 years if he deposits $800 at an annual interest rate of 3%, compounded annually?

Back

$874.18

Front

What are closing costs in a mortgage?

Back

Closing costs are fees associated with finalizing a mortgage, typically including loan origination fees, title insurance, and appraisal fees.

Front

If Erin Thompson is purchasing a house for $97,900 and the total closing costs are 3% of the mortgage, what are the total closing costs?

Back

$2,697

Front

What is the difference between fixed and variable interest rates?

Back

Fixed interest rates remain the same throughout the loan term, while variable interest rates can change based on market conditions.

Front

What is the impact of making extra payments on a loan?

Back

Making extra payments can reduce the principal balance faster, leading to less interest paid over the life of the loan.