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Financial Literacy in Action
Tutorial: The Cost of Credit

Access http://www.federalreserve.gov/pubs/

Based on your reading, respond to the following:

  • Summarize what you learned about the cost of credit from this reading.
  • How do APR, the length of the loan, and charges, such as late fees, affect the cost of credit?
  • Explain open-end credit and the different ways open-end finance charges are calculated.
  • What are the similarities and differences between open-end and closed-end leases?
  • What advice would you give a friend who was interested in borrowing a sizeable sum of money to make an important purchase?
Credit - Tutorial: Comparing the Cost of Credit
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