Lesson 20/21 Major - Lab

Front

What is an interest rate?

Back

An interest rate is the percentage of a loan amount that a lender charges a borrower for the use of their money, typically expressed as an annual percentage.

Front

Why is a low interest rate preferable for a mortgage?

Back

A low interest rate means lower monthly payments and less total interest paid over the life of the loan, making it more affordable.

Front

How do you calculate simple interest?

Back

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

Front

If you borrow $1200 at an 8% interest rate for 2 years, how much total will you pay back?

Back

$1392.

Front

What is the principal in a loan?

Back

The principal is the original sum of money borrowed or invested, excluding any interest or fees.

Front

What does a discount percentage mean in shopping?

Back

A discount percentage indicates how much the original price is reduced, allowing customers to pay less.

Front

If a pair of jeans is originally $50 and is on sale for 35% off, what is the sale price?

Back

The sale price is $32.50.

Front

What is the total amount Jerry will pay back if he borrows $4,000 at 6% interest for 5 years?

Back

$5,200.

Front

How do you find the interest earned on a principal of $800 at a 3.5% interest rate for 6 months?

Back

The interest earned is $14.

Front

What is the formula to find the total amount to be paid back on a loan?

Back

Total Amount = Principal + Interest.