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Principal and Interest Review:

Principal and Interest Review:. Principal is the amount invested or borrowed. Interest is the money that one pays or earns in addition to the principal invested or borrowed . In other words, if you take out a loan, you will pay back the principal plus the interest. Interest Rate Review.

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Principal and Interest Review:

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  1. Principal and Interest Review: Principal is the amount invested or borrowed. Interest is the money that one pays or earns in addition to the principal invested or borrowed. In other words, if you take out a loan, you will pay back the principal plus the interest
  2. Interest Rate Review Interest Rate is expressed as a percentage. It is the annual fee placed on a loan or investment Currently, banks are charging a 4-5% interest rate on a car. Credit card companies are charging about 15% interest rate, (up to 22%)
  3. Interest Rate (APR) Lenders are required to tell you the annual percentage rate (APR) in writing before you sign an agreement. The APR is the interest rate calculated in a consistent way so it’s easier to compare different borrowing options.
  4. Interest Rate So, A borrower desires a __________ interest rate. An investor desires a __________ interest rate.
  5. Compound(ing) Interest Compound(ing) Interest is when earned interest is added to the principal. It is Interest that is earned not only on the principal but also on the interest already earned
  6. Compounding Interest Example For example, if someone deposits $2,000 in an account that pays interest at 8 percent, he or she will earn $160 in interest after one year, for a balance of $2,160. If the depositor leaves this sum in the account for another year, however, he or she will earn $172.80 in interest because the 8 percent rate will apply to the new balance of $2,160, not the original $2,000 deposit. The longer the money is left in the account, the more dramatic the compounding effect.
  7. A Useful Site Online Compound Interest Calculator

  8. Credit: Your Best Friendor Your Worst Enemy?

  9. Slide 12.1 Credit: Your Best Friend or Your Worst Enemy? Credit Definitions Credit The ability to obtain goods and services before paying for them, based on a promise to pay later. Individuals who use credit are borrowing money. Revolving credit Credit that is available up to a limit and automatically renewed as debts are paid off or paid down. People who use revolving credit often make partial payments on their unpaid balances at regular intervals. Credit-card accounts offer revolving credit to credit-card users.
  10. Slide 12.1 Credit: Your Best Friend or Your Worst Enemy? How Credit Cards Can Mess You Up Online Daily Periodic Interest Rate Calculator
  11. Slide 12.2 Credit: Your Best Friend or Your Worst Enemy? Answers to Worksheet for Justin Jabowski
  12. Slide 12.3 Credit: Your Best Friend or Your Worst Enemy? Answers to Worksheet for Justin Jabowski
  13. Scenario “it is midnight, and your car breaks down on I-25 you are far from home. You use your cell phone to call an emergency auto repair service. The service visit will cost $50, plus the cost of any parts and labor that are needed to get you driving again. You have $7.57 in your pocket. Should you use credit?
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