1. SECTION
8-1
Single-Payment Loans pp

2. Key Words to Know single-payment loan (p. 284)
A loan that has to be repaid with one payment after a specified period of time.
promissory note (p. 284)
A written promise to pay a certain sum of money on a certain date in the future.

3. Key Words to Know maturity value (p. 284)
The total amount that must be repaid on a loan, including the principal borrowed and the interest owed.
term (p. 284)
The amount of time for which a loan is granted before it has to be repaid.

4. Key Words to Know ordinary interest (p. 284)
Interest on a loan calculated by basing the time of the loan on a 360-day year.
exact interest (p. 284)
Interest on a loan calculated by basing the time of the loan on a 365-day year.

5. Formula 1
Interest = Principal × Rate × Time

6. Formula 2 Ordinary Interest = Principal × Rate × Time ÷ 360
Exact Interest = Principal × Rate × Time ÷ 365

7. Formula 3
Maturity Value = Principal + Interest Owed

8. Example 1
Anita Bonita bank granted her a single-payment loan of $7,200 for 91 days at 12 percent ordinary interest.
What is the maturity value of the loan?

9. Example 1 Answer: Step 1 Find the ordinary interest owed.
Principal × Rate × Time
$7, × 12% × 91/360 = $218.40

10. Example 1 Answer: Step 2 Find the maturity value.
Principal + Interest Owed
$7, $ = $7,418.40

11. Example 2
Anita Sloane’s bank granted her a single-payment loan of $7,200 for 91 days at 12 percent exact interest.
What is the maturity value of the loan?

12. Example 2 Answer: Step 1 Find the exact interest owed.
Principal × Rate × Time
$7,200 × 12% × 91/365 = $ or $215.41

13. Example 2 Answer: Step 2 Find the maturity value.
Principal + Interest Owed
$7, $ = $7,415.41

14. Practice 1 Single payment loan of $2,750. Interest rate of 11 percent.
Exact day of interest: 50.
What is the interest owed?

15. Practice 1 Answer
$41.44

16. Pg. 285: 1-16