Paying off Debt

When you borrow money in the form of a loan or a credit card, you can end up paying more than the loan amount because you will pay ___ in addition to the loan amount.

• rate

• interest

• principal

• balance

Johnny takes out a $35,000 loan to purchase a recreational vehicle. He qualifies for a 4.5% interest rate, and his loan term is six years with a monthly payment of $555.59. How much interest will Johnny pay?

• $40,002.48

• $5,002.48

• $150.01

• $2675.42

Wiley borrowed $7,800.00 to help him start his lawncare business. He qualified for a 6% interest rate, and his loan has a three-year term with a monthly payment of $237.29. What will be the total amount Wiley pays for the loan?

• $8,542.44

• $742.44

• $16,848.00

• $5,298.76

Zelda paid for a $3,000 vacation using a credit card with a 12.5% interest rate. In order to pay the card off in 12 months, Zelda has determined that she will need to make payments of $265.25. What is the amount of interest that Zelda will pay?

• $397.88

• $1,256.75

• $3,183.00

• $183.00

Trinity is trying to select the best loan offer to pay for a new car. The cost of the car is $24,000.00. However, Trinity is going to make a down payment of $5,000. Which option has the lowest amount of interest owed?

• five-year loan at 4.5% with monthly payments of $354.22

• three-year loan at 5% with monthly payments of $569.45

• six-year loan at 4.8% with monthly payments of $304.23

• four-year loan at 6% with monthly payments of $446.22

What happens when you don't have enough money to pay for the things you charged?

• You end up owing less than the original amount of money you charged.
• You end up owing more than the original amount of money you charged.
• You end up owing the same amount of money you charged, it just takes a while to pay off.

What is the best way to buy a car?

• O% interest for 36 months on new or used
• Leasing
• Purchasing new at the end of the year
• purchase used and pay cash

What type of mortgage is best when buying a home?

• Fixed Rate 30 year mortgage
• Fixed Rate 15 year mortgage
• Adjustable Rate Mortgage
• Balloon Mortgage

The key to building wealth is

• drive reliable used cars
• get excellent interest rates
• get a good education and income
• to stay debt free

The principal of a loan is

• the percentage of the loan that must be paid to the lender in addition to the loan amount.

• the total amount paid when the loan is paid off.

• the amount of money loaned before any fees or interest.

• Mr. Pirner?