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4-2 LOANS

4-2 LOANS. OBJECTIVES. Read monthly payments from a table. Compute monthly payments using a formula. Compute finance charges on loans. promissory note principal annual percentage rate cosigner life insurance prepayment privilege. prepayment penalty wage assignment

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4-2 LOANS

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  1. 4-2LOANS OBJECTIVES Readmonthly payments from a table. Computemonthly payments using a formula. Computefinance charges on loans.

  2. promissory note principal annual percentage rate cosigner life insurance prepayment privilege prepayment penalty wage assignment wage garnishment balloon payment lending institution collateral Key Terms

  3. Example 1 What is the monthly payment for a $4,000 two-year loan with an APR of 8.50%?

  4. Example 2 What is the total amount of the monthly payments for a $4,000, two-year loan with an APR of 8.50%?

  5. EXAMPLE 3 Find the finance charge for a $4,000, two-year loan with an 8.5% APR?

  6. CHECK YOUR UNDERSTANDING Karl is borrowing x dollars over a three-year period. The monthly payment is y dollars. Express his finance charge algebraically.

  7. Monthly Payment Formula M = monthly payment p = principal r = interest rate t = number of years

  8. EXAMPLE 4 Mark bought a new car. The total amount he needs to borrow is $28,716. He plans on taking out a 4-year loan at an APR of 5.12%. What is the monthly payment?

  9. CHECK YOUR UNDERSTANDING Find the monthly payment for a $1,000, one-year loan at an APR of 7.5%.

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