understanding loans ms 8 ocs 12th

What is the principal amount in a loan?

• The total loan term

• The total amount of interest paid

• The fixed amount of money borrowed

• The monthly payment

What is a variable interest rate?

• An interest rate that remains the same throughout the loan term

• An interest rate that can change over time

• An interest rate that is always lower than fixed rates

• An interest rate that includes fees

Why should Lucy use APR instead of the interest rate when comparing loans?

• APR includes both the interest rate and fees

• APR does not depend on credit score

• APR is always lower than the interest rate

• APR is easier to calculate

What makes up Lucy's total loan payment each month?

• Only the fees

• Both the principal and interest

• Only the principal

• Only the interest

Why might a shorter loan term be beneficial?

• It has higher interest rates

• It increases the total interest paid

• It forces faster repayment of the principal

• It extends the loan term