4-1 stand up or sit down activity MOVE: Credit Musical Chairs

Multiple Choice

What is the main difference between installment and revolving credit?

• Installment requires regular monthly payments

• Revolving has fixed payment amounts

• Installment is used for any purchase

• Revolving is for specific purchases only

Multiple Choice

What is the main difference between secured and unsecured debt?

• Secured debt is tied to an asset, while unsecured debt is not.

• Secured debt has higher interest rates than unsecured debt.

• Unsecured debt can be repossessed for nonpayment, while secured debt cannot.

• Secured debt is always a loan, while unsecured debt is a credit card.

Multiple Choice

Benjamin deposits $1,000 into a savings account that pays 1% interest. At the end of the first year, he's earned $10 in interest and there is $1,010 in the account. If the account has simple interest, the 1% interest for year two would be based off ____________. If the account has compounding interest, the 1% interest for year two would be based off ________________.(NOTE: The first choice goes in the first blank, the second choice goes in the second blank)

• The original deposit ($1,000); The year one account balance ($1,010)

• The original deposit ($1,000);  The year one interest ($10)

• The year one account balance ($1,010); The year one interest ($10)

• The year one account balance ($1,010); The original deposit ($1,000)

Multiple Choice

What type of loan is an Auto Loan classified as?

• Revolving

• Installment

• Open-end

• Secured

Multiple Choice

Imagine Elijah takes out a mortgage to buy a house, choosing the longest repayment period offered. The downside of this decision is that the longer Elijah has the mortgage, the more _____.

• collateral that is required by the bank

• risk of defaulting on the mortgage

• equity will build after seven years

• total amount of interest paid

Multiple Choice

Sit down if Payday Loan is Variable Rate.

• Fixed Rate

• Variable Rate

• Interest Rate

• Loan Type

Multiple Choice

Aria and Scarlett are discussing payday loans. Which of the following statements is TRUE about these loans?

• They are harder to pay back because of low fees and high interest rates

• They are harder to pay back because of high fees and high interest rates

• They are easier to pay back because of lower fees and higher interest rates

• They are easier to pay back because of lower fees and lower interest rates

Multiple Choice

Which of the following is NOT a feature that makes a secured loan less costly than an unsecured loan?

• A high interest rate

• Collateral

• Less risk for the financial institution

• All of these are correct

Multiple Choice

What is the capital of France?

• Berlin

• Madrid

• Paris

• Rome

Multiple Choice

If the collateral for your secured loan can be taken away, why get a secured loan at all?

• Because they usually have a higher interest rate

• Because they usually have a lower interest rate

• Banks give you an extra 90 days to make a missed payment

• Banks typically don't charge interest for the first 12 months

Multiple Choice

What type of credit card is a Credit Card classified as?

• Revolving

• Installment

• Secured

• Unsecured

Multiple Choice

What type of credit is a mortgage classified as?

• Revolving

• Installment

• Open-end

• Close-end

Multiple Choice

Sit down if a Credit Card is ___

• Secured

• Unsecured

• Revolving

• Installment

Multiple Choice

Sit down if Payday Loan is an Installment.

• True

• False

• Maybe

• Not Sure

Multiple Choice

Assume that Louisa carried an average balance of $1,000 from her credit card purchases over the past year. The A.P.R. on her credit card for the past year was 19.99%. Approximately how much interest would Louisa have paid over the course of the year? 

• She would have paid interest charges of $2,000.

• She would have paid interest charges of $20.

• The credit card company would have paid Louisa $20.

• She would have paid interest charges of $200.

Multiple Choice

What does 'Buy Now, Pay Later' represent in terms of payment options?

• Fixed

• Variable

• One-time

• Immediate

Multiple Choice

Buy Now, Pay Later is ___

• Secured

• Unsecured

• Collateralized

• Guaranteed

Multiple Choice

What type of interest rate is an Auto Loan classified as?

• Fixed

• Variable

• Adjustable

• Simple

Multiple Choice

What type of loan is a Bank Loan classified as?

• Revolving Loan

• Installment Loan

• Secured Loan

• Unsecured Loan