Fall 2024 - AFA Final Exam Review

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What is simple interest?

Back

Simple interest is calculated using the formula: I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.

Tags

CCSS.7.RP.A.3

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How do you calculate the total interest paid on a loan?

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Total interest paid on a loan can be calculated using the formula: Total Interest = Principal x Rate x Time.

Tags

CCSS.7.RP.A.3

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What is the formula for straight-line depreciation?

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The formula for straight-line depreciation is: Depreciation Expense = (Cost of Asset - Salvage Value) / Useful Life.

Tags

CCSS.8.EE.C.7B

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What is the significance of the APR in loans?

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APR (Annual Percentage Rate) represents the annual cost of borrowing, including interest and fees, expressed as a percentage.

Tags

CCSS.7.RP.A.3

Front

How do you determine the monthly payment for a loan?

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The monthly payment can be calculated using the formula: M = P[r(1+r)^n] / [(1+r)^n – 1], where M is the monthly payment, P is the loan amount, r is the monthly interest rate, and n is the number of payments.

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What is the difference between subsidized and unsubsidized loans?

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Subsidized loans do not accrue interest while the borrower is in school, while unsubsidized loans begin accruing interest immediately.

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What is the concept of marketable value in relation to assets?

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Marketable value refers to the price at which an asset can be bought or sold in the market.

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How do you calculate the interest accrued during a non-payment period?

Back

Interest accrued during a non-payment period can be calculated using the formula: Interest = Principal x Rate x Time.

Tags

CCSS.7.RP.A.3

Front

What is the purpose of a down payment when financing a purchase?

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A down payment reduces the amount of the loan needed and shows the lender that the borrower is financially committed.

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What does it mean for an asset to depreciate to zero?

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Depreciating to zero means that the asset's value decreases to nothing over its useful life, often used for accounting purposes.