Banking and Loans

Interest can be defined as:

• a charge for lending money

• the amount owed for borrowing money

• the amount added into your savings account when opening a bank account

• a charge for convenience of accessing money in your bank

An APR of 25.99% in decimal form is....

• .02599

• .2599

• 2.599

• 25.99

APR stands for

• annual profit rate

• annual percentage rate

• annual participation rate

• annuity profit range

An APR of 5.4% in decimal form is....

• .54

• .054

• 5.4

• .0054

Select all of the following agencies which are "Credit Reporting Agencies"

• Equifax

• Trans-union

• Geico

• Progressive

What is a Grace Period?

• A period where you don't have to pay interest

• A period where if you pay, then you don't have to pay interest

• A period where the Bank will give you extra time to pay off what you owe

• A period where interest is accumulating but you don't have to pay it

If James takes out a loan with a Principal of 2500, an APR of 15%, and a minimum payment of $200 per month, how much of the $200 is going towards interest?

• 30 dollars

• 20 dollars

• 15 dollars

• 1 dollar and 15 cents

If James takes out a loan with a Principal of 2500, an APR of 15%, and a minimum payment of $200 per month, how much of the $200 is going towards the principal?

• 170 dollars

• 70 dollars

• 17 dollars

• 160 dollars

If James takes out a loan with a principal of 2500, an APR of 15%, and a minimum payment of $200 per month, how long will it take him to pay off the entire loan?

• 15 months

• 1 year and 3 months

• 13 months

• 1 year and 1 month

Is it *ever* a financially responsible decision to take out a "car title loan" or a "payday loan"?

• No, I should never take out one of these loans!

• Yes, I can take them out once in a while, just not too often!