SECTION 4C HIGHLIGHTS
Assignment: Read about Loan Payments, Credit Cards and Mortgages in
Section 4C of the text.
Do pp. 264-268 RQ(1-3), BSC(15-23 odd,25,27,29,31,33-35,37-40,45,49) WP(56),
ITN(60). Complete the Mortgage Worksheet (link below)
In The News #60 Link: MORTGAGE
FINDER
Web Project #56 Link: BUYING
A CAR ONLINE
EXTRA LINK:
In The News #61 Link: CHOOSING AND USING
A CREDIT CARD ,
CREDIT
CARD SHOPPING
Vocabulary: Installment Loan (Amortized Loan), Term, Loan Principal, Down
Payment, Fixed Rate Mortgage, Adjustable Rate Mortgage (ARM), Closing Costs,
Points, Prepayment Penalties, Refinancing
Notes:
In section 4C of the text we work with installment
loans. It is an unfortunate reality that many of us need to borrow money
from time to time. The reason it is unfortunate is that borrowing money
costs you above and beyond the amount you may need to borrow. Our goal is
to help you make informed choices when borrowing money.
The Loan Payment Formula (box on page 252 of
your text) can be used to calculate the regular payment amount for a standard
installment loan. When you consider borrowing money it is always
important to know how much you pay for the privilege, the amount of interest
you will pay. Many times, particularly when repaying large amounts, the
interest amount to be repaid is large. You should use the Excel
spreadsheet provided for Installment Loans to investigate this aspect of
installment loans.
SECTION 4C EXCEL
SPREADSHEET
In this section we also investigate the dangers of credit
cards. They may include high interest rates, uncontrolled
spending, and long term debt. You should be able to explain each of these
dangers.
The following link will lead you to some interesting financial calculators:
Skills to be mastered:
1. To calculate the installment to be paid on a loan using the Loan Payment
Formula (p. 252)
2. The proper interpretation of an amortization table (Installment Loan Table).
3. Ability to reconcile a credit card statement.
4. Articulate various mortgage strategies.