Unit 2 Flashcards
Is based on a 360-day year
Ordinary loan
Is based on a 356-day year
Exact interest
The total amount you must repay
Maturity value
A written statement to pay to a certain amount on a specific date in the future
Promissory note
A loan that is repaid in equal payments over a specified period of time
Installment loan
An index which shows the cost of borrowing money on a yearly basis
Annual percentage rate
The amount of time for which the loan is granted
Term
A loan that is repaid with one payment after a specified period of time
Single-payment loan
T or F: the down payment is the final payment you make when you are done paying off the loan
False
T or F: one reason you might want to make the final payment of your loan before the end of the term is so that you will pay less interest
True
T or F: the formula to determine the amount financed is the cash price minus the down payment
True
