SSEPF 4b&c - Relearning - Understanding Loans, Interest Rates, and Amortization

Group 1

• The total cost of borrowing money from a bank or lender, shown as a percentage.
• The amount of money you borrow from a bank.
• The monthly payment you make on a loan.
• The original amount of money borrowed, not including interest.

• Amortization
• Interest
• Principal
• Schedule

• The original amount of money you borrow in a loan, not including the interest.
• The total cost of borrowing money.
• The extra money you pay to the lender for borrowing.
• The monthly payment you make.

• Interest Rate
• Loan Term
• Calculator
• Borrowing

• A person or company that lets you borrow money.
• A person who borrows money.
• A plan that shows when and how much you need to pay.
• A type of loan used to buy a house.

• The number of years you have to pay back the loan.
• The total cost of borrowing money.
• The process of paying back a loan.
• The monthly payment you make.

Group 2

• $105
• $100
• $95
• $110

• Your monthly payment goes up.
• Your monthly payment goes down.
• Your monthly payment stays the same.
• You pay less interest over time.

• To avoid paying more money than necessary over time.
• To increase the amount you borrow.
• To shorten the loan term.
• To pay more interest.

• Interest
• Principal
• Loan Term
• Schedule

• How each monthly payment is divided into interest and principal.
• Only the total amount borrowed.
• Only the interest rate.
• The lender's profit.

• You pay less interest overall but higher monthly payments.
• You pay more interest overall and lower monthly payments.
• You pay the same amount of interest.
• Your monthly payments decrease.

Group 3

• Loan A
• Loan B
• Both cost the same.
• It depends on the lender.

• At the start of the loan, you pay more interest and less principal.
• You pay off the principal first.
• You pay the same amount of interest and principal each month.
• You only pay fees at the beginning.

• John
• His friend
• Both pay the same.
• It depends on the loan term.

• The monthly payment will go up.
• The monthly payment will go down.
• The monthly payment stays the same.
• You pay less interest.

• To see how much they will pay in total and plan their budget.
• To increase the interest rate.
• To avoid paying back the loan.
• To make the loan term longer automatically.

• Choose a loan with a lower interest rate.
• Borrow more money.
• Choose a longer loan term.
• Make smaller monthly payments.