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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

Consumer Credit

Review for quiz tomorrow

what we covered
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
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?
finding a down payment
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?
layaway plans
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

slide6

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

monthly payments
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

combining material
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.

combining material1
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.

combining material2
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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