Major Spending

If a house costs $200,000, what down payment is needed to avoid PMI?

• $30,000

• $40,000

• $50,000

• You can't avoid PMI

Answer explanation

$200k X 20%

If you make a $40,000 down payment on a $200,000 house, the principal amount is:

• $40,000

• $160,000

• $200,000

• None of the above

Answer explanation

$200k - $40K

If the principal amount is $160,000, and the interest rate is 12%, what is the interest expense for the first month?

• $1,600

• $16,000

• $1,200

• $12,000

Answer explanation

$160K X 1%

What is the potential tax advantage of owning a house

• You can deduct the principal

• You can deduct the interest paid

• You can deduct the down payment

• There is no tax advantage

State law requires you to buy this type of car insurance:

• Collision

• Comprehensive

• Property

• Liability

True or false. Being upside down on your car means you spent more on the car than it is worth

• True

• False

Answer explanation

It means you OWE more than the car is worth.

True or False. When buying a house, your credit score can impact whether you qualify for a loan.

• True

• False

True or False. When buying a house, your credit score can impact the interest rate that you have to pay.

• True

• False

True or False. When buying a car, your credit score can impact the interest rate that you have to pay.

• True

• False

True or False. When buying a car, your credit score can impact whether you qualify for a loan.

• True

• False