Installment Loans pp. 287-2898-2SECTIONSECTION

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

2

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 2 of 17

8-2

installment loan (p. 287)

A loan repaid in several equal payments over a specified period of time.

down payment (p. 287)

A portion of the cash price of an item that has to be paid before financing the rest on credit.

Key Words to KnowKey Words to Know

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

3

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 3 of 17

8-2

amount financed (p. 287)

The portion of the cash price that is owed on an item after making the down payment.

Key Words to KnowKey Words to Know

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

4

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 4 of 17

8-2

Amount Financed = Cash Price – Down Payment

Formula 1Formula 1

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

5

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 5 of 17

8-2

Down Payment = Amount × Percent

Formula 2Formula 2

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

6

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 6 of 17

8-2

Quint Terintino is buying a new refrigerator for $1,399. Terintino made a down payment of $199 and financed the remainder.

How much did Terintino finance?

Example 1Example 1

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

7

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 7 of 17

8-2

Step: Find the amount financed.

Cash Price – Down Payment

$1,399 – $199 = $1,200

Example 1 AnswerExample 1 Answer

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

8

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 8 of 17

8-2

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 2Example 2

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

9

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 9 of 17

8-2

Find the 20 percent down payment.

$1,140 × 20% = $228

Example 2 Answer: Example 2 Answer: Step 1Step 1

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

10

SECTION

Copyright © Glencoe/McGraw-Hill MBA, Section 8-2, Slide 10 of 17

8-2

Find the amount financed.

Cash Price – Down Payment

$1,140 – $228 = $912

Example 2 Answer: Example 2 Answer: Step 2Step 2

Pg. 288: 1-20Pg. 288: 1-20