About This Chapter
Interest & Purchases - Chapter Summary and Learning Objectives
Almost any type of purchase obtained through credit will involve an element of interest. Various types of math calculations might be required, and this chapter can help you become acquainted with many of them. Learn about common credit terms, installment purchases and promissory notes. Not only can you become familiar with the following topics, but you can also get real-world practice through fun examples while calculating the following:
- Markdown and markup
- Effective annual rate of interest
- Total interest for financing
|Index Numbers in Statistics: Uses & Examples||Identify index numbers and learn how to interpret them.|
|Credit Terms: Due Date, Invoice Date and EOM||Discuss commonly used credit terms, such as determining due date given terms, invoice date, 2/10 and EOM.|
|Installment Purchases: Payment & Terms||Detail how an installment purchase works, including discussion and examples of commonly used terms.|
|Deferred Payment vs. Cash Price: Calculation & Interest||Compare cash price and deferred payment price. Complete price calculations for purchase and financing options.|
|Markup & Markdown: Calculation & Examples||Demonstrate the methods for calculating markdown and markup through detailed examples of real life situations.|
|Effective Annual Rate: Formula & Calculations||Map out how to calculate effective annual rate with known present and future value/balance amounts. Show method for calculating the effective annual rate of interest given nominal rates.|
|Percentage Increase and Decrease: Calculation and Examples||Describe how to calculate percentage increases and decreases with realistic examples.|
|What is a Promissory Note? - Definition and Examples||Discuss promissory note terms using the example of selling a note to the bank. Understand how to make calculations for selling price, total interest, or effective rate.|
1. Index Numbers in Statistics: Uses & Examples
Watch this video lesson to learn what index numbers are. Learn how useful this statistical number is in the real world. You will also see some index numbers that we use and probably hear every day.
2. Credit Terms: Due Date, Invoice Date & EOM
After watching this video lesson, you will understand some of the key terms that companies use on the invoices that they send to you. Learn how to pay your invoices according to these terms so you aren't late.
3. Installment Purchases: Payment & Terms
After watching this video lesson, you will know how installment purchases work. Learn how you can calculate the amount of your fixed installment payment.
4. Deferred Payment vs. Cash Price: Calculation & Interest
Watch this video lesson to learn the difference between paying cash up front for an item versus making payments at a later time for an item. Watch and see how you may end up paying more for an item if you pay later.
5. Markup & Markdown: Calculation & Examples
After watching this video lesson, you will become familiar with how stores price their products to make a profit. Learn about how they increase their prices, markup, and how they decrease their prices, markdown.
6. Effective Annual Rate: Formula & Calculations
After watching this video lesson, you will understand how the interest rate that financial institutions, such as credit card companies, give you work. Also, learn how this interest rate may be different than the one you actually end up with.
7. Percentage Increase and Decrease: Calculation and Examples
After watching this video lesson, you will be able to calculate the percentage increase and decrease of changes that happen over time. You will also learn what you need in order to make your calculations.
8. Promissory Note: Terms & Calculations
Watch this video lesson, and you will learn how some promissory notes, such as mortgages, can be sold and why they are sold. Learn about the terms or conditions that go into such a note and how money is made with these notes.
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