Ron Larson
Browse the Topics, Table of Contents, and Index
Follow us:
Twitter Facebook

6.1 Introduction to Lending

6.1 Introduction to Lending
<
>
  • Math Help

    Lending institutions use many terms that borrowers may find confusing. For instance, in Example 3, the "cost of credit" is $141.06 and the "loan proceeds" are $1007.94. What does this mean? This means that you paid $141.06 to borrow $1007.94. So, loan proceeds are how much money you receive, and cost of credit is how much you pay to get that money. As you encounter new terms, try writing definitions of these terms in your own words. This will help you learn the new terms and you will be able to better understand and use them.

  • Consumer Suggestion

    Cleaning up bad credit is not as difficult a task as you might think. For tips on how to build good credit and fix bad credit, visit The Smarter Wallet.

  • Checkpoint Solution

    a. The total amount due is

    The loan proceeds are

    The cost of credit is

    b. The total amount due is

    The loan proceeds are $250,000.

    The cost of credit is

  • Comments (5)

    These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
    When posting a comment, you agree to our Terms of Use.

     _    _     ______    _  _      ___     __   __  
| || | ||  /_   _//  | \| ||   / _ \\   \ \\/ // 
| || | ||   -| ||-   |  ' ||  / //\ \\   \   //  
| \\_/ ||   _| ||_   | .  || |  ___  ||  / . \\  
 \____//   /_____//  |_|\_|| |_||  |_|| /_//\_\\ 
  `---`    `-----`   `-` -`  `-`   `-`  `-`  --`
    Showing 5 comments
    Subscribe by RSS
    system user
    Guest   5 years ago |
    He a snack
    1
    system user
    Guest   6 years ago |
    Ballz
    1
    system user
    Ron Larson (author)1 decade ago |
    He's sitting on the fridge because he is so happy that he got a new one.
    0
    system user
    Guest   1 decade ago |
    Why is the guy sitting on the fridge.
    1
    system user
    Ron Larson (author)1 decade ago |
    In Example 3, you can see the basic pro and con of buying on credit. The "pro" is that you get possession of the refrigerator now. The "con" is that you have to pay more than if you were able to buy it with cash now.
    1
©Larson Texts, Inc. All Rights Reserved.