Algebra with Finance Pre Test

If you have caused an accident, which type of automobile insurance would cover damage to your own car?

• Term

• Collision

• Liability

Matt and Eric are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Matt has borrowed $6,000 to take a foreign vacation. Eric has borrowed $6,000 to buy a car. Who is likely to pay the lowest finance charge?

• Matt will pay less because people who travel overseas are better risks.

• They will both pay the same because they have almost identical nancial backgrounds.

• Eric will pay less because the car is collateral for the loan.

Which of the following instruments is NOT typically associated with spending?

• Credit card

• Debit card

• Certicate of deposit

Which of the following credit card users is likely to pay the GREATEST dollar amount in finance charges per year, if they all charge the same amount per year on their cards?

• Vera, who always pays off her credit card bill in full shortly after she receives it.

• Jessica, who only pays the minimum amount each month.

• Megan, who pays at least the minimum amount each month and more, when she has the money.

If you had a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account?

• You cannot earn interest until you pass your 18th birthday.

• Earnings from savings account interest may not be taxed.

• Income tax may be charged on the interest if your income is high enough.

If you withdraw money from a CD before its maturity date, you will face a financial penalty.

• True

• False

It is cheaper to cash a paycheck at a bank where you have an account than it is to cash it at a paycheck‐cashing store.

• True

• False

The typical fee for a “bounced” check is between $5 and $10.

• True

• False

Which of the following are fixed expenses?

• Rent

• Food

• Electric Bill

Which of the following factors affect the amount of rent that will be charged for an apartment?

• The apartment’s size and number of bathrooms

• The apartment’s location

• Both A and B