Credit and Loans

The simple interest on a loan of $200 at 10 percent interest per year is

$20 per year until the loan is paid off.

What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?

$33.10

Which describes the difference between simple and compound interest?

Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.

Which describes an example of using unsecured credit?

Someone buys new gutters for a home with a credit card.

What best determines whether a borrower's interest rate goes up or down?

a market's condition

A similarity between mortgages and auto loans is that both

are less risky for lenders.

In determining whether to issue a loan, banks are not allowed to ask about an applicant's

country of origin.

Filing for bankruptcy can make it hard for a consumer to reestablish and obtain

credit

The type of credit people are most likely to use during their lifetimes is a

credit card.

What is a benefit of obtaining a personal loan?

getting large amounts of money to use immediately

A credit score is based in part on

income and total debt.

People who want to buy a house typically ask the bank for a .... over a 10- to 30-year period.

mortgage

An example of secured credit is a

mortgage.

Consumers who make higher payments on credit cards

pay less interest in the long run.

A way to build good credit is

paying bills when they are due.

Simple interest is paid only on the .

principal borrowed