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Installment Loans

SECTION. 8-2. pp. 287-289. Installment Loans. Calculate: amount financed on an installment loan. Section Objective. Key Words to Know. installment loan (p. 287) A loan repaid in several equal payments over a specified period of time. down payment (p. 287)

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Installment Loans

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  1. SECTION 8-2 pp. 287-289 Installment Loans

  2. Calculate: • amount financed on an installment loan Section Objective

  3. Key Words to Know installment loan (p. 287) A loan repaid in several equal payments over a specified period of time. down payment (p. 287) A portion of the cash price of an item that has to be paid before financing the rest on credit.

  4. Key Words to Know amount financed (p. 287) The portion of the cash price that is owed on an item after making the down payment.

  5. Formula 1 Amount Financed = Cash Price – Down Payment

  6. Formula 2 Down Payment = Amount × Percent

  7. A Picture Perfect Loan p. 287 Before the bank will give him a loan, what does Chen have to do first?

  8. Example 1 Tasheka Quintero is buying a new refrigerator for $1,399. Quintero made a down payment of $199 and financed the remainder. How much did Quintero finance?

  9. Example 1 Answer Step: Find the amount financed. Cash Price – Down Payment $1,399 – $199 = $1,200

  10. Example 2 Rebecca Clay purchased a washer and a dryer for $1,140. She used the store’s installment credit plan to pay for the items. She made a down payment and financed the remaining amount. What amount did she finance if she made a 20 percent down payment?

  11. Example 2 Answer: Step 1 Find the 20 percent down payment. $1,140 × 20% = $228

  12. Example 2 Answer: Step 2 Find the amount financed. Cash Price – Down Payment $1,140 – $228 = $912

  13. Practice 1 Matt Yokohama purchased a fountain for his newly landscaped backyard. The fountain cost $677. He made a down payment of 15 percent. What amount did he finance?

  14. Practice 1 Answer $575.45

  15. Practice 2 Janelle Lewis purchased a new dishwasher for $425. She made a 20 percent down payment and financed the remaining amount. Find the down payment and the amount financed.

  16. Practice 2 Answer Down payment: $85 Amount financed: $340

  17. END OF SECTION 8-2 Installment Loans

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