PF 2.1 Quiz

Principal: 10,000

Interest: 5%

Time: 5 years

Find the total loan amount (A) using the simple interest formula:

A=P(1+rt)

• $10,000

• $12,500

• $15,000

• $13,450

Which of these would you expect to be higher:

• Zero

• Simple Interest Rate

• APR

APR includes the simple interest plus...

• Fees

• Principal

• Time

How do you express 7.5% as a decimal?

• 0.75

• 0.075

• 0.0075

• 7.5

Principal: 1,000

Interest: 5.5%

Time: 8 months

Which is the correct formula?

• A = 1000(1+0.055*(8/12))

• A = 1000(1+0.55*(8/12))

• A = 1000(1+0.055*8)

• A = 1000(1+0.55*12)

Term

• The original amount of money that you're borrowing from a lender

• The amount of time a loan lasts.

• The amount the lender is charging you for borrowing money.

Principal

• The original amount of money that you're borrowing from a lender

• The amount of time a loan lasts.

• The amount the lender is charging you for borrowing money.

Interest Rate

• The original amount of money that you're borrowing from a lender

• The amount of time a loan lasts.

• The amount the lender is charging you for borrowing money.

Which of these is NOT a factor that contributes to whether or not you qualify for a loan, and once you do, what your interest rate will be?

• Credit Score

• Debt-to-Income Ratio

• Collateral

• Portfolio Balance

What is a Payday Loan?

• A loan taken out against your future paycheck.

• A loan taken out against your previous paycheck.

• A loan you offer someone else from your future paycheck.

• A loan you offer someone else with your previous paycheck.