Warm Up Problem

• Review Steps on Page 327• Complete problem 20 • 2896 x .20 = 579.20 (down payment)• 2896 – 579.20 = 2316.80 (amount borrowed)• Monthly payment = $201.53• 201.53 x 12 = 2148.36 (amount Repaid)• FC = 2418.36- 2316.80 = 101.56

Compute the final payment

8.5 page 319

Final payment

• Paying off a loan early saves interest and future income

• “10-day pay-off”

Equations

• Interest = Principal x Rate x Time• Final Payment = Previous Balance + current

month’s interest• Interest saved = Total payback – (sum of

previous payments + Final Payment)

Example One page 319

• What is the previous balance• 913.70 (3rd payment)• What is the interest?• 913.70 x .12 x 1/12 = 9.14 (for 4th month)• Find the final payment• (913.70 + 9.14) balance plus interest’• Concept check 1: • 824.20

Example 2, page 320

• Use example 1,• How much do they save paying off the loan

early?• Find the interest saved:• Total payback-(sum of previous payments +

Final Payment)• (6 x 310.50) – ( (3 x 310.50) + 922.84))• What you would have paid – what you did pay

Concept check 2 page 320

• (12 x 106.56) – (( 4 x 106.56) + 824.20))• 1,278.72 – (426.24 + 824.20)• 1,278.72 – 1,250.44• 28.28 (saved)

Check you work on problem 8, page 321

• Answer: • A 42.35• B 5,124.56• C 407.44

Homework page 321

• Problem 9• Show the steps with equations for full credit• Review on-line chapters 8.1- 8.5• www. Glencoe.com• Link on my website• Test on chapter 8 on ______________.