Personal Finance Module 2 Review

A tool to buy something now and pay for it later.

• Principal

• Interest

• Credit

• Convenience

The final payment date of a loan

• Grace Period

• Maturity date

• Loan Term

• Down Payment

A quick way to calculate interest for a lump sum (single payment).

• Amortization Calculation Formula

• Annual Percentage Rate

• Amortization Chart

• Simple Interest Formula

The cost that is paid for borrowing money, usually a percentage of the principal.

• Interest

• Credit

• Income

• Expense

The amount of money that you borrow (loan amount).

• Credit

• Interest

• Principal

• APR

The amount of time before interest starts accumulating if no payments are made on a loan.

• Loan Term

• Maturity Date

• Principal

• Grace Period

The amount of time that you have to make payments on a loan

• Loan Term

• Grace Period

• Maturity Date

• Interest

Used to calculate monthly payments on a loan

• Simple Interest Formula

• Amortization Calculation Formula

• Credit Score

• Quadratic Formula

The interest rate that includes fees and is calculated in a consistent way

• Principal

• Income

• APR

• Simple Interest Formula

Kathleen received a loan from her bank for $4,085 for a period of one year.The interest rate is 4.95%.The original loan amount and the interest must be repaid in full at the end of 1 year(One Payment).Determine the amount of interest that Kathleen will pay.

• $202.21

• $202.01

• $201.21

• $202.02