Chapter 8 Section 1
LOANS!
NAME: ________________
Define the following:
1. Principal:
2. Interest:
a. Formula (Simple Interest):
3. Single Payment Loan:
4. Maturity Value:
a. Formula:
5. Term (of a loan):
6. Some people take loans from family members instead of from banks or institutions. How might loans
from family members be different than loans from banks or other institutions?
Complete the Following Examples:
7. Anita’s Bank granted her a single payment loan of $7,200 for 91 days at 12% interest. What is the
maturity value of the loan?
STEP 1: Find the interest owed
Ordinary Interest = Principal x Rate x (Time  360 days)
STEP 2: Find the maturity value
Maturity value = Principal + Interest Owed
Chapter 8 Section 1
LOANS!
8. Compute the interest and the maturity value:
a. Loan:
$600
Interest:
10%
Time:
120 days
b. Loan:
Interest:
Time:
$3500
11.55%
40 weeks
c. Loan:
Interest:
Time:
$800
12%
10 months
d. Loan:
Interest:
Time:
$2000
8%
5 years
e. Loan:
Interest:
Time:
$950
5.5%
year and a half
f. Loan:
Interest:
Time:
$7500
3.5%
18 months
NAME: ________________