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Consumer Credit

Consumer Credit. Review for quiz tomorrow. What we covered:. Saving & Rounding Finding a down payment Layaway Plans Finding the finance charge (interest) Expressing the finance charge algebraically Monthly payments Combining this with previous material . Saving & Rounding.

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Consumer Credit

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  1. Consumer Credit Review for quiz tomorrow

  2. What we covered: • Saving & Rounding • Finding a down payment • Layaway Plans • Finding the finance charge (interest) • Expressing the finance charge algebraically • Monthly payments • Combining this with previous material

  3. Saving & Rounding • You want to purchase a $2,500 television. You are willing to save $275 per month. How long will it take for you to save up for the television? • You purchase an electric keyboard that costs $2,344. You can afford to save $150 per month. How long will it take?

  4. Finding a down payment • You want to purchase a house for $250,000. You are required to pay a down payment of 20%. How much is your down payment? • You purchase a dining room set for $5,100. You sign up for an installment plan, which requires an 18% down payment. How much is the down payment?

  5. Layaway plans You purchase a bicycle that sells for $2,500. It requires a 25% down payment and monthly payments over the next 3 years of $85.75. How much is the finance charge? down payment = ( $2,500) x (0.25) = $625 Monthly payments: ($85.75) (36) = $3,087 Total Paid: $625 + $3,087 = $3,712 Finance Charge: $3,712 - $2,500 = $1,212

  6. The price of a stove is “s” dollars. You make a 10% down payment for a 1 ½ year installation purchase. The monthly payment is “m” dollars. Express the finance charge algebraically. down payment = 10% of s = 0.1s Monthly payments: m dollars for 1 ½ years = 18m Finance Charge: Paying Price – Selling price = 18m + 0.1s - s

  7. Monthly Payments • You purchase a video game system that costs a total of $350. At the time of purchase, you are required to pay a down payment of 12%. The installment plan you agree to requires a minimum of $5 monthly payment and offers no interest for 2 years. If you make the minimum payment every month, how much must your last payment be to avoid paying interest? down payment = ( $350) x (0.12) = $42 Monthly payments: ($5) (23) = $115 Total Paid: $115 + $42 = $157 Last Payment: $350 - $157 = $193

  8. Combining Material • You have $50,000 in the bank earning 8% simple interest. You plan to use this money to purchase a car with a down payment of $450. Will your monthly interest be enough to pay for the down payment? Simple Interest: I = Prt I = (50,000) (.08) (1/12) I = $333.33 This will not be enough to cover the down payment.

  9. Combining Material • You have $50,000 in the bank earning 5% simple interest. You plan to use this money to purchase a car with monthly payments of $200. Will your monthly interest be enough to pay your monthly payment? Simple Interest: I = Prt I = (50,000) (.05) (1/12) I = $208.33 Your interest will be enough to cover your monthly payment.

  10. Combining Material • You want to purchase a new couch. The You agree to an installment plan that requires a 10% down payment. If you purchase the couch by putting $87 down, how much did the couch cost? 10% of what number is 87 (0.10) x = 87 x = 87 ÷ 0.10 The couch cost a total of $870

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