Loans and Interest Flashcard

Front

What do you need to get a loan?

Back

A steady job.

Front

A loan refers to something such as money that is borrowed. True or False?

Back

True.

Front

Calculate the total interest on a student loan of $1200 at 8% simple interest for 3 years.

Back

$288.

Front

If Lea took out a loan for $2,500 and the fee was 3% of the loan, how much was left after the fee?

Back

$2425.

Front

What is something a bank or financial institution makes and charges you interest for?

Back

Loan.

Front

Define 'interest' in the context of loans.

Back

Interest is the cost of borrowing money, usually expressed as a percentage of the loan amount.

Front

What is 'simple interest'?

Back

Simple interest is calculated only on the principal amount of a loan.

Front

What is the formula for calculating simple interest?

Back

Simple Interest = Principal x Rate x Time.

Front

If you borrow $1000 at a 5% interest rate for 2 years, how much interest will you pay?

Back

$100.

Front

What does APR stand for in loans?

Back

Annual Percentage Rate.