Describe the process for calculating interest and amount due at ...

[aabwk4]

Describe the process for calculating interest and amount due at maturity on a loan using the exact interest method.

Question 2

Explain why a customer might want to make a larger down payment when financing a purchase with an installment loan.

[elizabethrperez]

Answer to Question 1

Find the interest due by multiplying the principal by the rate of interest by the time in days expressed as a fraction with 365 in the denominator. Calculate the amount due at maturity by adding the interest to the original principal.

Answer to Question 2

By making a larger down payment, the initial balance is lowered which will result in lower monthly payments.