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Vocab Chs 7 & 8
Financial Lit
Question | Answer |
---|---|
Computing the finance charge based on the balance at the end of each day which includes new purchases, any payments or credits made; most companies use this method. | average-daily-balance method |
Shows the distribution of interest and principal over the life of a loan. | repayment schedule |
A loan that is repaid with one payment after a specified period of time. | single-payment loan |
The total amount you must repay. | maturity value |
Interest that the company charges to a credit account for not paying the total amount owed by the due date. | finance charge |
Computing the finance charge based on the portion of the previous balance you have not paid. | unpaid balance method |
Is based on a 360-day year. | ordinary interest |
Paying the previous balance plus the current month's interest when selling the "loan". | final payment |
Monthly statement that lists all of the items you purchased and other transactions during a one month period. | account statement |
Is based on a 365-day year. | exact interest |
A written statement to pay a certain amount on a specific date in the future. | promissory note |
A card authorizing purchases on credit. | credit card |
An existing line of credit at the business that issued it. | charge account |
A loan that is repaid in equal payments over a specified period of time. | installment loan |
The amount of time for which the loan is granted. | term |
The portion of the cash price that you owe after making the down payment. | amount financed |
A portion of the cash price of the item you are purchasing before financing the rest on credit. | down payment |
An index which shows the cost of borrowing money on a yearly basis. | annual percentage rate |