Single Payment Loan-BM

Brainstorm
Where can you find the funds for starting up the business?
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Slide 1: Tekstslide
Business MathSecondary Education

In deze les zitten 22 slides, met interactieve quizzen en tekstslides.

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Brainstorm
Where can you find the funds for starting up the business?

Slide 1 - Tekstslide

Slide 2 - Woordweb

Chapter8.1:Single Payment Loans
  • Describe a single-payment loan
  • Compute the maturity value and interest rate of a single payment loan
  • Evaluate the due date for loan payment

Slide 3 - Tekstslide

Chapter 8.1: Single Payment Loans
Pages 305-307

Slide 4 - Tekstslide

Single payment loan
A single-payment loan is a loan that you repay with one payment after a specified period of time. 
A business may be short of funds and need to borrow money to meet its payroll or pay for inventory and supplies.

Slide 5 - Tekstslide

Definitions
  • A promissory note is a written promise to pay a certain sum of money on a specific date in the future.
  • The maturity value of the loan is the total amount you must repay. It includes both the principal and the interest owed.
  • A loan’s term is the amount of time for which the loan is granted.
1. Ordinary interest is based on a 360-day year.
2. Exact interest is based on a 365-day year.


Slide 6 - Tekstslide

What is the significance of a single payment loan?

Slide 7 - Open vraag

What is a written promise to pay a certain sum of money on a specific date in the future?
A
Cheque
B
Promissory note
C
Invoice
D
Memo

Slide 8 - Quizvraag

What is the total amount you must repay?
A
Promissory note
B
Single payment
C
Maturity Value
D
Multiple payments

Slide 9 - Quizvraag

Formula
Interest = Principal × Rate × Time
Ordinary Interest = Principal × Rate × Time/360
Exact Interest = Principal × Rate × Time/365
Maturity Value = Principal + Interest

Slide 10 - Tekstslide

Example 1
Anita Sloane’s bank granted her a single-payment loan of $7,200 for 91 days to pay for new merchandise for her candle shop. Determine the maturity value of the loan if the rate is (a) 6% ordinary interest or (b) 6% exact interest.

Slide 11 - Tekstslide

Solution
Step 1: Find the ordinary interest owed.
Ordinary Interest = Principal × Rate × Time/360
$109.20 = $7,200.00 × 0.06 × 91/360
Step 2: Find the maturity value with ordinary interest.
Maturity Value = Principal + Interest
$7,309.20 = $7,200.00 + $109.20
Step 3: Find the exact interest owed.
Principal × Rate × Time/365
$7,200.00 × 0.06 × 91/365
= $107.704 = $107.70 Exact Interest


Slide 12 - Tekstslide

Step 4: Find the maturity value with exact interest.
Maturity Value = Principal + Interest
$7,307.70 = $7,200.00 + $107.70

Slide 13 - Tekstslide

Compute the (a) interest and (b) maturity value for each loan.
1. Parker Logan purchased a new surfboard costing $600 and financed it at 9% ordinary interest for 90 days.

Slide 14 - Open vraag

Give the steps of calculating the interest and maturity value of a loan.

Slide 15 - Woordweb

Example 2
Claudia Valdez took out a single-payment loan for $1,500.00 at 7.8% ordinary interest to pay her federal income tax bill. If the loan’s maturity value is $1,529.25, when would Claudia have to pay back the loan if she took it out on March 1?

Slide 16 - Tekstslide

Solution
Step 1: Find the interest
Maturity Value = Principal + Interest or Interest = Maturity Value – Principal
Interest = $1,529.25 – $1,500.00 = $29.25
Step 2: Find the time of the loan in days, t.
Ordinary Interest = Principal × Rate × t/360
$29.25 = $1,500.00 × 0.078 × t/360
$10,530 = $117t
90 = t

Slide 17 - Tekstslide

Claudia would have to pay back the loan in 90 days.
Step 3: Find the due date. Use the Elapsed Time Table on page A10. March 1 is the day
60 + 90 days = day 150, which is May 30.

Slide 18 - Tekstslide

How long would it take a construction loan for $548,048 to earn interest of $50,000 at 9% exact interest?

Slide 19 - Open vraag

Let t = How long it would take in days
$50,000 = $548,048× 0.09 ×t/365
$18,250,000 =$49,324.32t
370 = t

Slide 20 - Tekstslide

How can you calculate the time to pay back?

Slide 21 - Woordweb

Give the main points of the lesson.

Slide 22 - Woordweb