01:220:110 Study Guide - Final Guide: Interest, Credit History, Credit Bureau
21 Dec 2016
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Economics 110 - personal finance and decision making. Use of credit for personal needs (except a home mortgage); credit = arrangement to receive cash, goods, or services now and pay later. Recognized as a major force in the american economy; considered a sustaining force. Debt payments-to-income ratio - monthly debt payments/net monthly income; should spend no more than 20% of your net (after tax) income on consumer credit payments. Debt-to-equity ratio - total liabilities/net worth; max is 1: using market values and net worth of home to determine borrowing ability. Don"t spend more than you can afford : finance charges - total dollar amount you can pay to use credit, annual percentage rate (apr) - percentage cost of credit on a yearly basis. Calculate a cash advance fee: e. g. charges imposed for a cash advance. Cash advance fee: (2% of ) Total cost for one month = (+)
