Applied Math Chapter 8 Flashcard

Front

What is a down payment?

Back

A down payment is an initial upfront payment made when purchasing a large item, typically expressed as a percentage of the total purchase price.

Front

How do you calculate the down payment amount?

Back

To calculate the down payment amount, multiply the total price by the down payment percentage (e.g., Total Price x Down Payment Percentage).

Front

What is maturity value in the context of loans?

Back

Maturity value is the total amount that must be paid back at the end of a loan period, including both the principal and any interest accrued.

Front

How do you calculate interest on a loan using the exact interest method?

Back

Interest = Principal x Rate x Time (in years). For exact interest, time is calculated based on the actual number of days.

Front

What is ordinary interest?

Back

Ordinary interest is calculated based on a 360-day year, which simplifies the calculation of interest for short-term loans.

Front

How do you find the interest amount for a loan?

Back

Interest Amount = Principal x Rate x Time.

Front

What is the formula for calculating a percentage of a number?

Back

Percentage of a number = (Percentage / 100) x Number.

Front

How do you calculate the total cost after a down payment?

Back

Total Cost = Total Price - Down Payment.

Front

What is the formula for calculating the total amount due on a loan?

Back

Total Amount Due = Principal + Interest.

Front

How do you convert days into years for interest calculations?

Back

To convert days into years, divide the number of days by 360 (for ordinary interest) or 365 (for exact interest).