1. Basic Loans
Lesson 14

2. Single-Payment Loans
14a

3. A single-payment loan is a loan that will be repaid all at the same time after a specific time period.
A promissory note is a single-payment loan. It is a “promise” to repay the money by a certain date.

4. The term is the amount of time for which the loan was given.
The maturity value is the amount of money the loan will be worth in the future.
The term is the amount of time for which the loan was given.

5. Exact Interest; based on a 365-day year.
Ordinary Interest; based on 360-day year.
Exact Interest; based on a 365-day year.

6. Formulas…
Interest =
Principal
Rate
Time * *
Ordinary
Interest
𝑇𝑖𝑚𝑒 360 =
Principal
Rate * *
Exact
Interest
𝑇𝑖𝑚𝑒 365 =
Principal
Rate * *
Maturity Value =
Principal +
Interest

7. Suppose Barney was granted a single-payment loan of $8,500 for 95 days at 12% ordinary interest rate. Find the maturity value of the loan.
Find Ordinary Interest.
Ord. Int. = 8,
Ord. Int. = $𝟐𝟔𝟗.𝟏𝟕
Find Maturity Value.
M.V. = 8,
M.V. = $𝟖,𝟕𝟔𝟗.𝟏𝟕

8. Suppose Lily was granted a single-payment loan of $6,300 for 75 days at 15% exact interest rate. Find the maturity value of the loan.
Find Exact Interest.
Ex. Int. = 6,
Ex. Int. = $𝟏𝟗𝟒.𝟏𝟖
Find Maturity Value.
M.V. = 6,
M.V. = $𝟔,𝟒𝟗𝟒.𝟏𝟖

9. Installment Loans
14b

10. The amount financed is the amount left after the down payment is made.
An installment loan is a loan that is repaid in several equal payment over a time period.
The down payment is part of the total amount that must be paid at the time of the purchase.
The down payment will either be a set amount of money or a percentage of the total.
The amount financed is the amount left after the down payment is made.

11. Formulas…
Amount Financed
Cash
Price
Down
Payment = -
Down
Payment =
Amount
Percent *

12. Amt. Financed = (Total) – (Down Payment)
Suppose Robin is buying a new big-screen TV for $1,556. She made a down payment of $199. Find the amount financed.
Amt. Financed = (Total) – (Down Payment)
Amt. Financed = 1,556−199
Amt. Financed = $𝟏,𝟑𝟓𝟕.𝟎𝟎

13. D.P. = 5,650 0.2 D.P. = $𝟏,𝟏𝟑𝟎.𝟎𝟎 Amt. Financed = 5,650−1,130
Ted was buying a new furniture set for $5,650. He made a down payment of 20%. Find the amount financed.
Find Down Payment.
D.P. = 5,
D.P. = $𝟏,𝟏𝟑𝟎.𝟎𝟎
Find Amount Financed.
Amt. Financed = 5,650−1,130
Amt. Financed = $𝟒,𝟓𝟐𝟎.𝟎𝟎

14. Lesson 14: Basic Loans Questions Summarize your notes Homework
Worksheets