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Terms
• single-payment
loan
• principal
• term
• promissory
note
• collateral
• lien
• ordinary
interest method
• exact interest
method
Section 8.1 Loans and Interest
Objectives
• Describe single-payment loans.
• Calculate ordinary interest.
• Calculate exact interest.
• Determine the interest rate of a loan.
Build Your Math Skills
Review these math skills to prepare for the lesson that follows.
1. Convert percentages to decimals by moving the decimal two places to
the left. Round to the nearest cent ($0.01) if necessary. Example: 5.25% →
0.0525
A. 9.25% → B. 12.1% →
C. 8.375% → D. 5.5% →
2. Multiply decimals. Round to the nearest cent ($0.01) if necessary. Example:
$975 × 0.07 = $68.25
A. $565 × 0.04 = B. $1,114 × 0.05 =
C. $768 × 0.075 = D. $405.75 × 1.05 =
3. Divide decimals. Round to the nearest cent ($0.01) if necessary. Example:
$14.50 ÷ 0.02 = $725
A. $750 ÷ 25.5 = B. $1050 ÷ $500 =
C. $465.50 ÷ $750.80 = D. $75 ÷ $125 =
4. Simplify fractions. Example:
16
32
=
1
2
A.
20
25
= B.
14
49
=
C.
18
81
= D.
21
56
=
5. Convert fractions to decimals by dividing the numerator by the
denominator. Round to the nearest hundredth if necessary (0.01). Example:
11
23
= 0.48
A.
15
56
= B.
24
49
=
C.
9
25
= D.
7
10
=