Podcast
Questions and Answers
What is the simple interest on a loan of $200 at 10 percent interest per year?
What is the simple interest on a loan of $200 at 10 percent interest per year?
20 per year until the loan is paid off.
Simple interest is paid only on the...
Simple interest is paid only on the...
principal borrowed.
What is a benefit of obtaining a personal loan?
What is a benefit of obtaining a personal loan?
getting large amounts of money to use immediately.
A way to build good credit is...
A way to build good credit is...
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A similarity between mortgages and auto loans is that both...
A similarity between mortgages and auto loans is that both...
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Filing for bankruptcy can make it hard for a consumer to reestablish and obtain...
Filing for bankruptcy can make it hard for a consumer to reestablish and obtain...
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People who want to buy a house typically ask the bank for a...
People who want to buy a house typically ask the bank for a...
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Consumers who make higher payments on credit cards...
Consumers who make higher payments on credit cards...
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The type of credit people are most likely to use during their lifetimes is a...
The type of credit people are most likely to use during their lifetimes is a...
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What best determines whether a borrower's interest rate goes up or down?
What best determines whether a borrower's interest rate goes up or down?
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An example of secured credit is a...
An example of secured credit is a...
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In determining whether to issue a loan, banks are not allowed to ask about an applicant's...
In determining whether to issue a loan, banks are not allowed to ask about an applicant's...
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Which describes an example of using unsecured credit?
Which describes an example of using unsecured credit?
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What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?
What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?
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A credit score is based in part on...
A credit score is based in part on...
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Which describes the difference between simple and compound interest?
Which describes the difference between simple and compound interest?
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Study Notes
Interest Types
- Simple interest on a $200 loan at 10% per year amounts to $20 annually until repayment.
- Simple interest applies only to the principal amount borrowed.
- Compound interest on a three-year, $100 loan at 10% totals $33.10.
Loans and Credit
- A personal loan provides immediate access to large sums of money.
- Mortgages and auto loans are considered less risky for lenders.
- A mortgage, typically repaid over 10 to 30 years, is a common request for home buyers.
Credit Management
- Building good credit requires timely bill payments.
- Higher credit card payments reduce overall interest paid in the long run.
- The most commonly used form of credit throughout life is a credit card.
Creditworthiness
- A borrower's interest rate is largely determined by market conditions.
- Secured credit examples include mortgages, which are backed by collateral.
- Unsecured credit can be illustrated by purchasing items like home gutters with a credit card.
Credit Applications
- Banks are prohibited from inquiring about an applicant's country of origin when issuing loans.
- Credit scores consider factors such as income and total debt.
Distinctions in Interest
- The key difference between simple and compound interest lies in how the latter also accrues interest on previously earned interest alongside the principal.
Studying That Suits You
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Description
Test your knowledge on essential concepts of credit and loans with these flashcards. Each card defines terms related to simple interest, personal loans, and credit-building strategies. Ideal for students or anyone looking to improve their financial literacy.
