Installment Loans pp. 287-289 8-2 SECTION. Click to edit Master text styles Second level Third level...
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Transcript of Installment Loans pp. 287-289 8-2 SECTION. Click to edit Master text styles Second level Third level...
Installment Loans pp. 287-2898-2SECTIONSECTION
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 2 of 17
8-2
Section ObjectiveSection ObjectiveCalculate:
• amount financed on an installment loan
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 3 of 17
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installment loan (p. 287)
A loan repaid in several equal payments over a specified period of time.
down payment (p. 287)
A portion of the cash price of an item that has to be paid before financing the rest on credit.
Key Words to KnowKey Words to Know
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 4 of 17
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amount financed (p. 287)
The portion of the cash price that is owed on an item after making the down payment.
Key Words to KnowKey Words to Know
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 5 of 17
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Amount Financed = Cash Price – Down Payment
Formula 1Formula 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 6 of 17
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Down Payment = Amount × Percent
Formula 2Formula 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 7 of 17
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Before the bank will give him a loan, what does Chen have to do first?
A Picture Perfect Loan p. 287A Picture Perfect Loan p. 287
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 8 of 17
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Tasheka Quintero is buying a new refrigerator for $1,399. Quintero made a down payment of $199 and financed the remainder.
How much did Quintero finance?
Example 1Example 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 9 of 17
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Step: Find the amount financed.
Cash Price – Down Payment
$1,399 – $199 = $1,200
Example 1 AnswerExample 1 Answer
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 10 of 17
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Rebecca Clay purchased a washer and a dryer for $1,140. She used the store’s installment credit plan to pay for the items. She made a down payment and financed the remaining amount.
What amount did she finance if she made a 20 percent down payment?
Example 2Example 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 11 of 17
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Find the 20 percent down payment.
$1,140 × 20% = $228
Example 2 Answer: Example 2 Answer: Step 1Step 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 12 of 17
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Find the amount financed.
Cash Price – Down Payment
$1,140 – $228 = $912
Example 2 Answer: Example 2 Answer: Step 2Step 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 13 of 17
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Matt Yokohama purchased a fountain for his newly landscaped backyard. The fountain cost $677. He made a down payment of 15 percent.
What amount did he finance?
Practice 1Practice 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 14 of 17
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$575.45
Practice 1 AnswerPractice 1 Answer
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 15 of 17
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Janelle Lewis purchased a new dishwasher for $425. She made a 20 percent down payment and financed the remaining amount.
Find the down payment and the amount financed.
Practice 2Practice 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 16 of 17
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Down payment: $85
Amount financed: $340
Practice 2 AnswerPractice 2 Answer
Installment Loans8-2END OF SECTIONEND OF SECTION