Installment Purchases: Payment & Terms


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question 1 of 3

Purchasing an item now and agreeing to pay for it in a series of future payments is known as a/an _____.

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1. Which of the following is an example of an installment purchase with simple terms?

2. A car costs $24,000. The installment purchase has terms of annual payments for 5 years with an interest of 3 percent. What is the yearly payment?

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About This Quiz & Worksheet

Installment purchases are a type of payment system that allows you to pay for an item over time. This quiz/worksheet combo will help ensure you understand the math necessary to calculate an item's total cost.

Quiz & Worksheet Goals

In these assessments, you'll be tested on:

  • Defining installment purchases
  • Identifying interest rates
  • Using the installment purchases formula in practice

Skills Practiced

This quiz and worksheet allow students to test the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related installment purchases lesson
  • Problem solving - use acquired knowledge to solve installment purchase practice problems
  • Knowledge application - use your knowledge to answer questions about installment purchases

Additional Learning

To learn more about this subject, review the accompanying lesson called Installment Purchases: Payments & Terms. This lesson covers the following objectives:

  • Providing real-world examples of when you might use installment purchases
  • Demonstrating a formula for calculating total cost using interest
  • Explaining the benefits and drawbacks of installment purchases