Unit 10 BB2 Credit and Loan Options

A fee paid by a borrower to the lender for the use of borrowed money.

• bills

• interest

paying for something with money that is borrowed and must be paid back, usually with interest

• credit
• income
• resources
• salary

the money paid by the borrower to the lender for the use of the lender's money

• interest
• savings plan
• scarce
• purchase

Amortization is the paying off of debt with a ____________________ repayment schedule in regular installments over a period of time for example with a mortgage or a car loan.

• fixed

• variable

• differentiated

• fluctuating

A portion of each payment is for interest while the remaining amount is applied towards the __________________________ balance.

• principal

• interest

• interest rate

• loan term

Initially, a large portion of each payment is devoted to __________________________.

• interest

• the principal balance

• loan term

• interest rate

To find the ending balance each month, take the beginning balance ___________ the principal.

• times

• divided by

• and add it to

• minus

What is the total amount of the loan payments for a $5,200, two-year loan with an APR of 6.75%? Round to the nearest dollar.

• $2,000.58

• $5,573.57

Jerry is buying an engagement ring and needs a loan of $4,000.He plans on taking out a 3-year loan at an APR of 4.13%. What is your monthly payment?

• $478.92

• $110.34

• $140.34

• $118.33

Find the monthly payment necessary to pay off the loan with the following loan amount, the annual interest rate, and the length of the loan.

Amount: $6000

Rate: 8%

Time: 3 years

• $160.99

• $188.19

• $208.40

• $245.88