Week 6 Flashcard

Front

Which of the following is NOT one of the 3 parts of a loan: Term, Rate, Principal, Down Payment?

Back

Down Payment

Front

What is principal?

Back

The amount of money that you borrow from a lender

Front

What is term?

Back

The time period you have to pay off the loan

Front

What is rate?

Back

The percent you pay in interest

Front

What are the two types of Rate?

Back

APR and APY

Front

What does APR stand for?

Back

Annual Percentage Rate

Front

Which of the following loans will have the LOWEST monthly payment? 5% for 30 years, 5% for 20 years, 6% for 30 years, 6% for 20 years

Back

5% for 30 years

Front

Which of the following loans will have the HIGHEST monthly payment? 5% for 30 years, 5% for 20 years, 6% for 30 years, 6% for 20 years

Back

6% for 20 years

Front

How does loan term affect the total interest paid?

Back

A longer loan term results in a higher total interest paid, while a shorter loan term results in a lower total interest paid.

Front

Amortization breaks your loan into equal monthly payments and shows the amount of your money that goes to paying _____ and the amount of your money that goes to paying_____ each month.

Back

Interest and principal