Personal Finance - 6.07 - Major Expenditures

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

• security deposit.

• down payment.

In which scenario should renters insurance be considered?

• Zach and Leah have rented an apartment in an urban area.

• Tim and Hanna are living with his parents in the basement of their home for six months while flood damage is being repaired in their home. They are paying his parents rent during the time they are living in their home.

The equity that one builds by making mortgage payments is:

• the value of the home after the mortgage debt is subtracted.

• purchasing a housing unit as rental property.

Rent is defined as:

• the cost of using someone else’s property.

• the fee charged for performing property management tasks.

Alyssa is considering purchasing a car and wants to be sure she can afford to drive it during the school year when she does not have a job. Which expense would not be considered part of the total transportation expenses?

• Depreciation

• Parking

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.

• a hidden cost.

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

• Convenience foods

• Ready-to-eat foods

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 leastimportant to consider?

• How much time she has available to prepare food

• Her personal preferences

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

• she would be purchasing the vehicle by making payments over time.

• she would be renting the vehicle by making payments over time, although the vehicle title would remain with the lease grantor.