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6.1 Introduction to Lending

6.1 Introduction to Lending
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  • Math Help

    To help borrowers understand the contractual obligations of a particular loan, the federal government requires lending institutions to disclose to each borrower in writing several pertinent facts regarding the loan before the borrower is asked to sign a promissory note. This requirement is governed by the Truth in Lending Act. Some of the required disclosures include:

    • the loan proceeds
    • the total amount due
    • the finance charge (see page 255)
    • the annual percentage rate (see page 256)
  • Consumer Suggestion

    If you are concerned about having to pay back a loan, visit FinAid.org. Here you will find a Loan Repayment Calculator which estimates your monthly loan payment and the salary needed to pay that amount.

  • Checkpoint Solution

    The loan occurs on March 17 and is due 120 days from that date.

    So the note is due on July 15.

    The total amount due is

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    Ron Larson (author)1 decade ago |
    I use the following poem to remember the number of days in a month.
    Thirty days hath September,
    April, June, and November;
    All the rest have thirty-one,
    Save February, with twenty-eight
    And one day more you add to it each year in four.
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