8.1 Single-­‐Payment Loans Objective: Students will be able to compute the maturity value and interest amount of a single-­‐
payment loan. A single-­‐payment loan: a loan that you repay with one payment after a specified period. A promissory note: a type of single-­‐payment loan. Maturity value: the total amount you must repay. Ordinary interest: use 360 Exact interest: use 365 Interest = Principal ∗ Rate ∗ Time ÷ 360 or 365 (Previous balance) Maturity = Principal + Interest Ex: LaVar Brown borrowed $4,357. The bank granted him a single-­‐payment loan at 8.75 percent exact interest for 250 days. a. Find the exact interest owed. Interest = 4357 ∗ 8.75% ∗ 250 ÷ 365 = $261.12 b. What is the maturity value of his loan? Maturity = 4357 + 261.12 = $4,618.12 Hw#1 Pg 286. # 5-­‐15