PFIN 6.07

The equity that you build by making mortgage payments is:

• the value of the home after the mortgage debt is subtracted
• purchasing a housing unit as rental property
• a home loan where the real estate is collateral
• the amount of money paid on the home at the time of purchase

A rental agreement is often referred to as:

• a lease
• an amenity
• renters insurance
• a mortgage

In which scenario below should renters insurance be considered?

• Steve and Teri have purchased a home in a rural area.
• Tim and Hanna are living with his parents in the basement of their home for six months while flooddamage is being repaired in their home. They are paying his parents rent during the time they are livingin their home.
• Zach and Leah have rented an apartment in an urban area.
• Don and Denise are landlords for several rental properties.

Brett borrowed money to purchase a vehicle without making a down payment and now he owes more on the vehicle than it is worth. This situation is referred to as:

• being upside down on the loan
• depreciation
• leasing
• a hidden cost

Chad has decided to rent an apartment and is gathering information to be sure he has enough money saved for all the expenses when his moves in. His landlord explained to him that he would need to pay a fee to cover any potential damages that might occur while Chad is living in the apartment. This fee is called the:

• rental agreement
• down payment
• amenities
• security deposit

Shelby is working on her spending plan and would like to spend less on her food for 6 months as she saves toward purchasing a more reliable vehicle. As she makes her plan, which factor would be least important to consider:

• How much time she has available to prepare food.
• The skills she has acquired for preparing meals.
• The nutritional value of the foods she purchases.
• Her personal preferences

Rent is defined as:

• the cost of using someone else’s property
• the fee charged for performing property management tasks
• an advance payment for costs beyond normal wear and tear
• the purchase price of a housing unit

Alyssa is considering purchasing a car and wants to be sure she can afford to drive it during the school year when she doesn’t have a job. Which expense WOULD NOT be considered part of the total transportation expenses: 

• automobile payment
• fuel
• parking
• depreciation

Melissa needs to a vehicle and is considering leasing one. This means:

• She will need to pay a larger down payment to offset the lease agreement fees.
• She would be purchasing the vehicle by making payments over time.
• Her depreciation costs will likely be higher.
• She would be renting the vehicle by making payments over time, although the vehicle title would remainwith the lease grantor.

When making food decisions, which of the following is most likely to be least expensive?

• fast food restaurants
• convenience foods
• ready-to-eat foods
• full-service restaurants