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Practical Business Math Procedures - Chapter 14 Key Terms Flash Cards
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- 1AmortizationProcess of paying back a loan (principal + interest) by equal periodic payments.
- 2Amount financedCash price - down payment.
- 3Annual percentage rate (APR)True or effective annual interest rate charged by sellers. Required to be stated by Truth in Lending Act.
- 4Average daily balanceSum of daily balances ÷ number of days in billing cycle.
- 5Cash advanceMoney borrowed by the holder of a credit card. It is recorded as another purchase and is used in the calculation of the average daily balance.
- 6Daily balanceCalculated to determine customer's finance charge: previous balance + any cash advantage + purchases - payments
- 7Deferred payment priceTotal of all monthly payments + down payment.
- 8Down paymentAmount of initial cash payment made when an item is purchased.
- 9Fair Credit and Charge Card Disclosure Act of 1988Act that tightens controls on credit and companies soliciting new business.
- 10Finance chargeTotal Payments - actual loan cost.
- 11Installment loanLoan paid off with a series of equal periodic payments.
- 12Loan amortization tableTable used to calculate monthly payments.
- 13Open-end creditSet payment period. Also, additional credit amounts can be added up to a set limit. It is a revolving charge account.
- 14Outstanding balanceAmount left to be paid on a loan.
- 15Revolving charge accountCharges for a customer are allowed up to a specific maximum, a minimum monthly payment is required, and interest is charged on the outstanding balance.
- 16Truth in Lending ActFederal Law that requires sellers to inform buyers, in writing of 1. the finance charge and 2. the annual percentage rate. The law does not dictate what can be charged.
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- Beschreibung
- Flash cards for the Key Terms section of Practical Business Math Procedures Chapter 14.
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- DANIEL OLDHAM
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