Name: ______________________

Class: _______

Date: _______

Main Types of Credit Organizer

Directions: Summarize the main types of credit and include key term(s) listed at the
bottom of this sheet. Give examples when possible in the spaces provided.
Credit
Type

Details

Examples

Key Terms: trade credit, loan credit, sales credit, finance charge, down payment,
installment loan, promissory note, collateral, cosigner

6200/6600 Principles of Business and Finance

Summer 2010

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Name: ______________________

Class: _______

Date: _______

Credit: Primary or Promoter Product Activity

Directions: Complete the chart using advertisements that include credit offers to
businesses, the government, and individuals.
Advertisement

Type of credit offered

1
www.staples.com

Credit Cards:
Business and personal

Is credit the primary

product or is it used to
promote the sale of
goods and services?
Used to promote the sale
of goods or services

6200/6600 Principles of Business and Finance

Summer 2010

Page 336

Name: ______________________

Class: _______

Date: _______

Advantages and Disadvantages of Using Credit Organizer

Directions: Summarize common advantages and disadvantage of businesses using
credit. Include key term(s) listed at the bottom of the sheet and examples when
possible.
Advantages

Disadvantages

Key Terms: credit rating

6200/6600 Principles of Business and Finance

Summer 2010

Page 337

Name: ______________________

Class: _______

Date: _______

Advantages and Disadvantages of Using Credit Activity

Directions: Determine the advantage or disadvantage of using credit for each
example in the spaces provided.
1.

Rufus, the owner of A-1 Auto Mechanic, paid his business bills on time
during the three years of operation.
______________________________________________________________
______________________________________________________________
2.

Rufus noticed seven purchases for products not used by the business
possibly made by one of his employees on the business credit card.
______________________________________________________________
______________________________________________________________
3.

For filing taxes, Rufus has been able to use only credit card statements from
his Business American Express to track purchases.
______________________________________________________________
______________________________________________________________
4.

Toni charged about $6,000 worth of clothes and accessories over several
shopping sprees. Toni can barely make the minimum payments of about
$400 each month.
______________________________________________________________
______________________________________________________________
5.

Rufus submitted a year-end summary for his business credit card without
having to go through three years of receipts.
______________________________________________________________
______________________________________________________________
6. Rufus issued a credit card to an employee to purchase supplies.
______________________________________________________________
______________________________________________________________
7. Rufus received free software by frequently using his business credit card.
______________________________________________________________
______________________________________________________________
8. Rufus suspects a customer stole several customer files from his desk.
______________________________________________________________
______________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

Page 338

Name: ______________________

Class: _______

Date: _______

Cost of Credit Organizer

Directions: In your own words, respond to the questions in the spaces provided.
1. What factors are included to compute interest?
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
2. How is simple interest calculated?
________________________________________________________________
________________________________________________________________
________________________________________________________________
3. How is time determined for a loan for each of the provided lengths?
Years
________________________________________________________________
________________________________________________________________
Months
________________________________________________________________
________________________________________________________________
Days
________________________________________________________________
________________________________________________________________
4. How is a maturity date calculated?
________________________________________________________________
________________________________________________________________
________________________________________________________________
5. How is a decreasing loan payment calculated?
________________________________________________________________
________________________________________________________________
________________________________________________________________
6. What is disclosed in APR?
________________________________________________________________
________________________________________________________________
________________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

Page 340

Name: ______________________

Class: _______

Date: _______

Maturity Date Activity

Directions: Calculate the maturity dates in the spaces provided.
Date loan made

Time length of loan

1. January 15

10 days

2. August 10

30 days

3. May 5

45 days

4. October 24

90 days

5. March 3

4 months

6. January 12

6 months

6200/6600 Principles of Business and Finance

Maturity Date
January 25

Summer 2010

Page 341

Name: ______________________

Class: _______

Date: _______

Converting Time and Percents Activity

Directions: Convert the provided time and percents into decimals in the spaces
provided.
Time:
1. 1 month =

________

2. 3 months =

________

3. 6 months =

________

4. 9 months =

________

5. 1 year 6 months =

________

6. 2 years 3 months =

________

7. 10 years 4 months =

________

8. 15 years=

________

Percent:
9.
.4% =

________

10.

8% =

________

11.

10% =

________

12.

15% =

________

13.

17.5% =

________

14.

18% =

________

15.

22.5% =

________

16.

25% =

________

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Summer 2010

Page 342

Name________________________________ Class__________ Date___________

Simple Interest Activity
Directions: Calculate the cost of credit and record it in the interest column. Use the
simple interest rate formula: I=P * R * T.
Principal

Interest Rate

Time

$150

3 months

$150

6 months

$300

10

6 months

$300

10

9 months

$1,000

12 months

$1,000

18 months

$10,000

18

1 year

$10,000

18

2 years and 3 months

$180,000

15 years

$180,000

30 years

Interest
$18

Directions: Provide responses to the provided questions.

1. What is the relationship between the time length of a loan and interest?
______________________________________________________________________
______________________________________________________________________
2. Why are time and percents converted into decimals?
______________________________________________________________________
______________________________________________________________________
3. How should debtors compare credit costs among options?
______________________________________________________________________
______________________________________________________________________
4. Why is it important for debtors to compare credit cost among options?
______________________________________________________________________
______________________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

Page 344

Name: ______________________

Class: _______

Date: _______

Installment Interest Activity

Directions: Calculate the total payment for a loan in the spaces provided.
Loan: Decreasing Loan Payment Schedule
$1,500 Car loan, 12% interest rate, monthly payments are $100 plus interest
Unpaid Balance * Interest rate = Interest (Remember: The amount of interest is based
on the portion of the year.)
Interest + Loan Repayment = Total Payment

Months
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Totals

Unpaid Balance
$1,500

Interest
$15

Loan
Repayment
$100

Total Payment
$115

Directions: Provide responses to the provided questions.

1. Is this purchase worth the cost? Why or Why not?
___________________________________________________________________
___________________________________________________________________
__________________________________________________________________
2. What economic and personal factors can affect interest rates?
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

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Summer 2010

Rank cards as 1 or 2, 1 being the most cost

efficient card and 2 the least. Explain ranking
results.

CARD 1
CARD 2
Business/Government Business/Government

6200/6600 Principles of Business and Finance

Other fees

Other APRs

Annual Percentage
Rate (APR)

Annual fee

Name and type of

card

Terms

CARD 3
Individual

CARD 4
Individual

Page 348

Rank cards as 1 or 2, 1 being the most cost

efficient card and 2 the least. Explain ranking
results.

Choosing the Right Credit Card Activity

Directions: Compare the cost of credit for credit cards in the table provided.

Name________________________________ Class__________ Date___________

Name________________________________ Class__________ Date___________

Main Factors for Granting Credit and Credit Documents Organizer
Directions: Describe the listed factors examined for granting credit and credit
documents in the spaces provided. Include key term(s) listed at the bottom of the sheet.
Section A
Three Cs of credit

Credit application

Factors for Granting Credit

Information provided by
credit bureaus

Documentation of credit
data

Key term(s): credit bureau

6200/6600 Principles of Business and Finance

Summer 2010

Page 349

Main Factors for Granting Credit and Credit Documents Organizer Continued
Section B
Directions: Describe the listed credit documents.
Credit Contract

6200/6600 Principles of Business and Finance

Statement of Credit

Summer 2010

Page 350

Name________________________________ Class__________ Date___________

Three Cs of Credit Scoring Guide
Advanced, Proficient, and Progressing levels are based on whether tasks criteria
are met.
Advanced: All three of the proficient level criteria are met PLUS student provided visual
aid for each C.
Character Visual Aid
Capacity Visual Aid
Capital Visual Aid
Proficient: All nine tasks are accomplished. Student defined and provided two
examples of actions for each C. This is the core of what must be achieved.
Character
Action 1
Action 2
Capacity
Action 1
Action 2
Capital
Action 1
Action 2
Progressing: Six of nine proficient level tasks are accomplished. Student defined and
provided one example for each C.
Character
Action
Capacity
Action
Capital
Action

6200/6600 Principles of Business and Finance

Summer 2010

Page 351

C RE DI T AP P L I CA TI O N F OR A B US I N ES S AC C O UN T
BUSINESS CONTACT INFORMATION
Title:
Company name:
Phone:
Fax:
E-mail:
Registered company address:
City:
State:
Date business commenced:
Sole proprietorship:
Partnership:
Corporation:
BUSINESS AND CREDIT INFORMATION
Primary business address:
City:
State:
How long at current address?
Telephone:
Fax:
E-mail:
Bank name:
Bank address:
Phone:
City:
State:
Type of account
Account number
Savings
Checking
Other
BUSINESS/TRADE REFERENCES
Company name:
Address:
City:
State:
Phone:
Fax:
E-mail:
Type of account:
Company name:
Address:
City:
State:
Phone:
Fax:
E-mail:
Type of account:
Company name:
Address:
City:
State:
Phone:
Fax:
E-mail:
Type of account:
AGREEMENT
1. All invoices are to be paid 30 days from the date of the invoice.

ZIP Code:
Other:

ZIP Code:

ZIP Code:

ZIP Code:

ZIP Code:

ZIP Code:

2. Claims arising from invoices must be made within seven working days.
3. By submitting this application, you authorize Contoso, Ltd. to make inquiries into the
banking and business/trade references that you have supplied.
SIGNATURES

Title:
Date:

Title:
Date:

6200/6600 Principles of Business and Finance

Summer 2010

Page 352

Name: ______________________

Class: _______

Date: _______

Credit Application Content Activity

Directions: Respond to the questions in the spaces provided.
What information on the individual and business credit applications is similar?

What information on the individual and business credit applications is different?

State in your own words the possible reasons for differences in individual and business
credit applications.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

Page 353

Group doing the gallery walk ___________ Class__________ Date__________

Credit Contract Activity
Directions: Use the checklist to check specified content of a credit contract.
Checklist
__________ Credit Contract includes the listed items. This is the core of what
must be achieved.
Finance charges-How much? _____
Cost of services-How much _____
Add-on feature to buy other items.
Statement indicating finance charges will be reduced if contract is paid in full
before ending date.
Statement indicating a copy of contract will be provided.
Comments about contract content:

----------------------------------------------------------Group doing the gallery walk ___________ Class__________ Date__________

Credit Contract Activity
Directions: Use the checklist to check specified content of a credit contract.
Checklist
__________ Credit Contract includes the listed elements. This is the core of what
must be achieved.
Finance charges-How much? _____
Cost of services-How much _____
Add-on feature to buy other items.
Statement indicating finance charges will be reduced if contract is paid in full
before ending date.
Statement indicating a copy of contract will be provided.
Comments about contract content:

6200/6600 Principles of Business and Finance

Summer 2010

Page 357

Name: ______________________

Class: _______

Date: _______

Statement of Account Activity

Directions: Use Figure 18-6 on page 467 in Intro to Business, 6e, Thomson SouthWestern textbook to answer questions in the spaces provided.
1. What is the previous balance?
2. Did the customer make a payment on this account the previous month? Why?
3. How many purchases were made this billing period? What is the total?
4. What is the minimum amount due on this statement of account?
Notes from discussion: ________________________________________

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________

6200/6600 Principles of Business and Finance

Summer 2010

Page 358

Class: _______

Date: _______

6200/6600 Principles of Business and Finance

Fair Credit Reporting Act

Credit Use Regulations

Fair Credit Billing Act

Equal Credit Opportunity Act

Credit Application Regulations

Truth-in-Lending Law

Summer 2010

Page 360

Credit Regulations and Credit Assistance Activity

Directions: Summarize the regulations or credit assistance options provided.

Name: ______________________

6200/6600 Principles of Business and Finance

Credit Card Accountability,

Responsibility, and Disclosure
Act

Fair Debt Collections Act

Consumer Credit Reporting

Reform Act

Summer 2010

Credit Regulations and Credit Assistance Activity continued

Page 361

6200/6600 Principles of Business and Finance

Bankruptcy

Credit Counselor

Credit Assistance
Debt repayment plan

Summer 2010

Credit Regulations and Credit Assistance Activity continued

Page 362