Student Loans Someday you might want to earn a college degree, buy a car, or purchase a home. A loan can help you reach those goals. Why might you consider obtaining a loan?
Lesson Objective Calculate the down payment and the amount financed on an installment loan. Content Vocabulary • installment loan installment loan A loan you repay in equal payments over a specified period of time. down payment A portion of the cash price of an item you are purchasing which you pay before financing the rest on credit, usually required when purchasing an item with an installment loan. amount financed The portion of the cash price owed after making the down payment. • down payment • amount financed
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?
Example 1 Answer Step: Find the amount financed. Cash Price – Down Payment $1,399 – $199 = $1,200
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?
Example 2 Answer: Step 1 Find the 20 percent down payment. $1,140 × 20% = $228
Example 2 Answer: Step 2 Find the amount financed. Cash Price – Down Payment $1,140 – $228 = $912
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?
Practice 1 Answer $575.45
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.
Practice 2 Answer Down payment: $85 Amount financed: $340