CM- CH8 Test Review (P2)

Loan that is repaid in one payment with interest.

• single- payment loan

• principal

• term

• promissory note

Initial amount of a deposit or loan.

• single- payment loan

• principal

• term

• promissory note

Length of time money will be borrowed.

• single- payment loan

• principal

• term

• promissory note

Written promise, or contract, to pay back a loan.

• single- payment loan

• principal

• term

• promissory note

Any asset that is pledged as security for a loan.

• collateral

• lien

• ordinary interest method

• exact interest method

Legal agreement giving the lender the right to claim assets of a borrower if it is necessary to repay a loan.

• collateral

• lien

• ordinary interest method

• exact interest method

Method for calculating interest that assumes each month has 30 days, for a total of 360 days in the year.

• collateral

• lien

• ordinary interest method

• exact interest method

Method by which interest is calculated that uses the exact length of the term divided by 365 to get an exact fraction of the year.

• collateral

• lien

• ordinary interest method

• exact interest method

Loan for which payments are made at predetermined intervals.

• installment loan

• level payment plan

• amortization table

• down payment

Repayment plan that is designed to have the same payment amount in each installment.

• installment loan

• level payment plan

• amortization table

• down payment