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What if there was a deflation at a rate of 3.2%?

Inflation – You bought a house in 2006 for $150,000. How much will your house be worth when you pay it off in 2036 if the inflation rate is 3.2%?. What if there was a deflation at a rate of 3.2%?. 14.2 – Installment Buying. Vocabulary.

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What if there was a deflation at a rate of 3.2%?

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  1. Inflation – You bought a house in 2006 for $150,000. How much will your house be worth when you pay it off in 2036 if the inflation rate is 3.2%? What if there was a deflation at a rate of 3.2%?

  2. 14.2 – Installment Buying

  3. Vocabulary • Installment Buying: borrowing to finance purchases and repaying with periodic payments • Closed-End Credit: borrowing a set amount and paying a series of equal installments until the loan is paid off • Open-End Credit: no fixed number of installments, the consumer just pays until there is no balanced owed

  4. Closed-End Credit • Use simple interest, but we need the total • Here is a one-step formula to get the total, so you don’t have to go back and add: A = P(1 + rt) • Divide the total into even payments

  5. Car Loan – You would like to buy a new car for $13,000. You are going to be taking out a loan for 4 years at 6.75% add-on interest compounded monthly. If you do not put any money down, how much will your monthly payments be? How much would your monthly payments be if you had a trade in value of your old car for $1,200? What is the difference in monthly payments?

  6. You bought a new apartment and wanted to purchase new furniture. You buy $2700 worth with a down payment of $300. If the loan is for 2 years at 8% add-on interest, what are your monthly payments?

  7. You would like to buy new kitchen appliances. You can afford $275 a month. The store you are purchasing from has an add-on interest rate of 7.3% and the loan is for 36 months. How much can you spend?

  8. You can afford $45 a month for a new TV. The store will give you a loan with an add-on interest rate of 7.3% for 2 years. How much can you spend?

  9. Open-End Credit • This is your credit cards • Each month you will receive an itemized bill (lists purchases, cash advances, credits, balance owed, minimum payment) • Finance Charges will also be applied – interest, annual fees, carrying charges

  10. Find the finance charge a bank will charge it’s customer who has an unpaid balance of $412.33 at 1.3% Now, assume the customer made $32.20 in purchases and paid $75 towards their bill. What will their unpaid balance be at the end of the month?

  11. Complete the table below to determine each month’s unpaid balance. Use an interest rate of 1.1%

  12. Homework • Page 878 # 6 – 10, 18, 20, 21, 30

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