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May 13, 2019
Short-Term Borrowing
Most people need to borrow money for large purchases, such as homes. When money is borrowed to pay for real estate, it is called a mortgage. The real estate is the security, or what the bank can take if payments are not met. The money is usually paid back over a long term. Most other borrowing works the same way, but is short term.
May 13, 2019
loan - $ borrowed with a promise to repay
- loans are often to buy a car, to pay for home improvements, to pay for a vacation, to consolidate debt
- security can be such things as real estate, business equipment, future wages, ...
*** the more valuable the security, the lower the interest rate ***
- repaid in regular instalments (weekly, biweekly, semi- monthly, or monthly)
Which of the following would have the lowest interest rate? The highest?
Mortgage Car Loan Credit Card
May 13, 2019
line of credit - a pre-approved loan without a specific purpose
- borrower has a credit limit, just as with a credit card
May 13, 2019
Which has higher interest rates?
Borrowing $ or Saving $
May 13, 2019
Questions
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