BR: Copy the following terms and leave space to write definitions

1. Annual fee2. Balance 3. bankruptcy4. Cash advance5. Collateral6. cosigner7. credit8. Credit card9. Creditor10. Credit bureau11. Credit history12. Credit limit

13. Credit report14. Debt15. Default16. Grace period17. Interest rate18. Minimum payment19. Monthly payment20. Principal21. Term22. Transaction fee23. Interest24. Debit cart

Calculating Interest

I=Interest P= The principal

which is the amount borrowed

R= Interest Rate T=Time

Simple Interest: I=PRT

1. TIECHIA PURCHASES A NEW COMPUTER ON HER CREDIT CARD. THE COMPUTER COSTS $1200. IF SHE HAS AN INTEREST RATE OF 15% AND PAYS OVER 3 YEARS, HOW MUCH INTEREST DOES SHE PAY?

2. SONIA IS PURCHASING A NEW CAR. HOW MUCH INTEREST DOES SHE PAY IF SHE BORROWS $20,000, THE INTEREST RATE IS 4% AND SHE PAYS OVER 4 YEARS?

 3. LAVELLE WANTS TO BUY A NEW CONDO. THE ONE HE WANTS COSTS $150,000. HOW MUCH INTEREST DOES HE PAY IF HE IS ABLE TO GET A 6% INTEREST RATE FOR 30 YEARS? HOW MUCH TOTAL DOES HE PAY?

4. STEPHON BUYS NEW FURNITURE FOR $2500. HIS INTEREST RATE IS 10% OVER 2 YEARS. HOW MUCH INTEREST DOES HE PAY? HOW MUCH TOTAL DOES HE PAY?

Calculating Interest

PV= Present Value

r= interest rate as a decimal

N=number of time periods

PV*(1+r)n=FV

Compound Interest

Make these headings on a sheet of paper

Establishing credit Maintaining credit Using credit Losing credit