Slide 1

Review for quiz tomorrow Consumer Credit Slide 2 What we covered: Saving & Rounding Finding a down payment Layaway Plans Finding the finance charge (interest) Expressing the finance charge algebraically Monthly payments Combining this with previous material Slide 3 Saving & Rounding You want to purchase a $2,500 television. You are willing to save $275 per month. How long will it take for you to save up for the television? You purchase an electric keyboard that costs $2,344. You can afford to save $150 per month. How long will it take? Slide 4 Finding a down payment You want to purchase a house for $250,000. You are required to pay a down payment of 20%. How much is your down payment? You purchase a dining room set for $5,100. You sign up for an installment plan, which requires an 18% down payment. How much is the down payment? Slide 5 Layaway plans You purchase a bicycle that sells for $2,500. It requires a 25% down payment and monthly payments over the next 3 years of $85.75. How much is the finance charge? ( $2,500) x (0.25) Monthly payments:($85.75) (36) Total Paid: down payment = = $3,087 $625 + $3,087= $3,712 Finance Charge: $3,712 - $2,500= $1,212 = $625 Slide 6 The price of a stove is s dollars. You make a 10% down payment for a 1 year installation purchase. The monthly payment is m dollars. Express the finance charge algebraically. 10% of s Monthly payments:m dollars for 1 years Finance Charge: down payment = = 0.1s = 18m Paying Price Selling price = 18m + 0.1s- s Slide 7 Monthly Payments You purchase a video game system that costs a total of $350. At the time of purchase, you are required to pay a down payment of 12%. The installment plan you agree to requires a minimum of $5 monthly payment and offers no interest for 2 years. If you make the minimum payment every month, how much must your last payment be to avoid paying interest? ( $350) x (0.12) Monthly payments:($5) (23) Total Paid: down payment = = $115 $115 + $42= $157 Last Payment: $350 - $157= $193 = $42 Slide 8 Combining Material You have $50,000 in the bank earning 8% simple interest. You plan to use this money to purchase a car with a down payment of $450. Will your monthly interest be enough to pay for the down payment? Simple Interest: I = Prt I = (50,000) (.08) (1/12) I = $333.33 This will not be enough to cover the down payment. Slide 9 Combining Material You have $50,000 in the bank earning 5% simple interest. You plan to use this money to purchase a car with monthly payments of $200. Will your monthly interest be enough to pay your monthly payment? Simple Interest: I = Prt I = (50,000) (.05) (1/12) I = $208.33 Your interest will be enough to cover your monthly payment. Slide 10 Combining Material You want to purchase a new couch. The You agree to an installment plan that requires a 10% down payment. If you purchase the couch by putting $87 down, how much did the couch cost? 10% of what number is 87 (0.10) x = 87 x = 87 0.10 The couch cost a total of $870