Budget and Credit Unit Test 10/16/2020

What is credit?

• an arrangement in which you receive money, good, or services now in exchange for the promise to pay later

• an arrangement in which you receive goods or services in exchange for other goods or services

• an arrangement in which you receive money now and pay it back later with fees

Carla has applied for a loan. Which condition makes it likely that she will get an unsecured loan?

• She has a very good credit history

• She is ready to pay a huge amount in interest

• She is willing to put up her home as collateral for the loan

Lawrence got a car loan from a bank, with the car as collateral. What kind of loan did he get?

• a secured loan

• an unsecured loan

• a fixed-rate loan

If the principal is $350 and the interest rate is 3 percent, what is the simple interest earned in one year?

simple interest = P × r × t

• $10.50

• $30.25

• $105

Andrew has a four-year college loan for $20,000. The lender charges a simple interest rate of 5 percent. How much interest will he have to pay?

simple interest = P × r × t

• . $800

• $4,000

• $10,000

Suppose that you have the option to buy an item with either cash or credit. Under which condition would you use credit?

• if you don't want to pay interest

• if you want to build a good credit history

• if you like carrying a lot of cash on you

Which of these people is likely to run into problems when using a credit card?

• Sheila, who often indulges in impulse buying

• Kaitlin, who doesn't have a good credit history

• Max, who wants to buy important things even when he doesn't have cash

Which term describes a person's previous pattern of borrowing and repaying loans?

• credit practice

• credit pattern

• credit history

Jamie's parents have told him that he needs to pay his credit card bills on time to establish good credit. How will good credit help him in the future? Choose 2 answers.

• He will get free credit points.

• He will get establish good credit

• He will get loans more easily.

A plan for dividing your paycheck into three categories: needs, savings, and wants is called:

• Bank Statement

• Budget known as the 50/20/30 rule

• Savings Account

• Checking Account