Financial Literacy Ch 7/8

Another name for finance charge is __________.

• financial windfall

• interest

• balance

• principal

Credit cards and debit cards are the same thing.

• true

• false

When you get your credit card statement, a payment that you made toward your account will show on the statement as

• a positive number (added to the balance).

• a negative number (subtracted from the balance).

• part of the Debit section

When you use credit to purchase an item, it means which of the following.

• buy now, pay now

• buy later, pay later

• buy now, pay later

• buy later, pay now

Remembering that P x R x T = I (principal x rate x time = interest). Also remember when using partial years, we used 360 days or 12 months to equal a year (to make it easier for you). You purchase a new MacBook Pro computer and a few accessories because you will be heading off to college soon. You will be paying Best Buy back in installments in 6 months. If you paid $1100 for your items and they are charging you 6% to borrow the money, how much interest will you have to pay?

• $3

• $30

• $33

• $330

Principal can also be called

• amount you borrow and amount you finance

• amount you borrow and the cost of a loan

• cost of a loan and interest

You need to buy a new refrigerator. Best Buy has a deal where you can purchase the frig and pay it back in equal monthly installment payments with a small amount of money as a down payment. If the selling price was $949 plus 5.5% sales tax and you had to pay 10% down before you could take the frig home, how much would you pay in sales tax?

• $52.00

• $52.10

• $52.19

• $52.20

Using that same question above, if you paid $949 plus 5.5% sales tax and 10% down before you could take the frig home, how much would you pay as a down payment?

• $1000.12

• $100.12

• $10.01

• $0

Using that same question above, if you paid $949 plus 5.5% sales tax and 10% down before you could take the frig home, how much would you be financing?

• 918.80

• $900.18

• $980.08

• $901.08

Since you got your loan interest free, if you paid $949 plus 5.5% sales tax and 10% down before you could take the frig home, how much would you pay for each monthly installment if you had to pay for 12 months?

• $7.50

• $75.00

• $75.09

• $75.10