Unit 7.1-7.4 Quiz

Which type of debt is considered revolving credit? 

• A credit card

• A mortgage

• An auto loan

• A small business loan

Mike is considering a 9.99%, $10,000 loan to be repaid after 6 years. What does that mean?

• Term is 9.99%, principal is $10,000, interest rate is 6 years

• Term is 6 years, principal is $10,000, interest rate is 9.99%

• Term is $10,000, principal is 9.99%, interest rate is 6 years

• Term is $10,000, principal is 6 years, interest rate is 9.99%

Using the equation for simple interest, how much should JJ expect to pay the bank, in total, for his 3 year, $10,000 loan at 5% interest?

• $1,500

• $11,500

• $31,500

• $150,000

Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to...

• Decrease your principal

• Decrease your interest rate

• Increase your term

• Increase your total payments

All of the following are methods of reducing your monthly payment on a secured loan EXCEPT:

• Having a good credit score

• Putting down a larger down payment

• Increasing your income

• Lengthening the term of the loan

What is considered to be a good first step when you are struggling to pay your secured loans?

• Call your lender to work out a payment plan

• Catch up by using your credit card

• Take a short term loan from a payday lending service

• Stop payments on other debt because secured debt is more important

All of the following are benefits of federal student loans compared to private student loans, EXCEPT…

• Federal student loans generally have lower interest rates

• Federal student loans can be forgiven under specific circumstances

• Federal student loans provide more options for repayment

• Federal student loans have no limit to how much you can borrow

Christine owes $23,000 in student loans and has a minimum payment of $230 per month. She decides to make an additional $100 payment towards the loan principal every month. What impact will the additional payment have?

• The additional payment will increase the total cost of her loan

• The additional payment will decrease the total cost of her loan

• The additional payment will increase the time it takes to repay her loan

• The additional payment will decrease the interest rate charged on her loan

Which of the following student loan repayment plans would result in the same monthly payment over the course of the loan?

• Standard Repayment Plan

• Graduated Repayment Plan

• Income-Based Repayment Plan

• Pay As You Earn (PAYE) Repayment Plan

Calculate the value of A.