I can calculate the amount financed on an installment

loan. I can find the monthly payment.

Vocabulary & Formulas

• Installment Loan: repaid in several equal payments over a specific time.

• Down Payment: portion of the cash price.• Down Payment = Cash Price x Percent• Amount Financed: the portion of the cash price

you owe after making the down payment.• Amount Financed = Cash Price – Down Payment.• Monthly Payment = (Amount Financed ÷ 100) x

Value from table on p. 799

Example 1

Big Screen TVCash Price: $1,999.9910% Down Payment

Down Payment = Cash Price x Percent = $1,999.99 x .10 = 199.999 = $200.00

Amount Financed = Cash Price – Down Payment = $1,999.99 - $200.00 = $1,799.99

To find the monthly payment we will use p. 799 chart on simple interest installment loans.

The big screen TV can be financed for 12 months at 8%.

From the table: 8.70Monthly Payment = (Amount Financed ÷ 100) x Value from table = ($1,799.99 ÷ 100) x 8.70 =$17.9999 x 8.70 = $156.60 monthly

Example 2New CarpetingCash Price: $345015% Down Payment18% Interest for 6 months

Down Payment = Cash Price x Percent = $3450 x .15 = $517.50

Amount Financed = Cash Price – Down Payment = $3450 - $517.50 = $2,932.50

From table: 17.55Monthly Payment = (Amount Financed ÷ 100 ) x Value from table

= ($2,932.50 ÷ 100) x 17.55 = $29.33 x 17.55 = $514.74 monthly!

B19: p. 289 First do #11-14 & #19 then work on #15-#18.

On #15-#18 you must find the down payment, amount financed, and

monthly payment. Use 12% for 24 months as the

financing terms on each.