7th Review for Final

2. Jaime is creating a budget for the first time and doesn’t know which to use - NET PAY or GROSS PAY. What do you tell him?

• “Use net pay, because it’s the total amount you’ve earned minus taxes and other deductions.”
• “Use gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month.”
• “Use net pay, because it’s the total amount you’ve earned for the month.”
• “Use gross pay, because that is the amount that is reported to the government for taxes.”

1. Magda is going to finance her car purchase using an auto loan. Which statement below is accurate?

• Her principal is the cost of the car, minus any down payment she makes
• Her interest rate is the total cost she’ll pay after making all of her principal and interest payments
• Choosing a shorter term means it will take her longer to repay the loan
• It’s likely that her monthly payment will be between 4-5% of the cost of the car

5. All of the following are characteristics of a secured credit card EXCEPT…

• Your credit limit is dependent on the amount of your security deposit
• They lower the risk of banks when issuing credit to users with no credit history
• They help you build a credit history and improve your credit score
• They don’t have a spending limit, so you have to be very mindful of how much you buy with them

4. What do you need to subtract from a college’s cost of attendance in order to find the net price?

• Expected Family Contribution
• Application fees
• Personal expenses
• Your grants and scholarships

7. The monthly premium for Kevin’s renters insurance is $15, and his deductible is $500. During the month of April, someone breaks into his apartment and steals or destroys $2200 worth of his possessions. How much will Kevin pay and how much will the insurance pay to replace his items?

• Kevin pays $0 // insurance company pays $2200
• Kevin pays $15 // insurance company pays $2200
• Kevin pays $500 // insurance company pays $2200
• Kevin pays $500 // insurance company pays $1700

10. All of the following can be found in your credit report EXCEPT…

• Your credit payment history
• Your checking account balance history
• The average age of your credit accounts
• Your total number of active credit accounts

6. Zoe buys three new lipsticks from a store at the mall. Which payment method would reduce the amount of money in her checking account?

• Pays with a prepaid card she loaded earlier in the month
• Uses her credit card.
• Uses her debit card.
• Pays with cash she had in her purse

11. Suppose you are trying to switch banks or open a brand new credit card. Which strategy will likely lead to the WORST long-term outcome?

• Look for sign-up bonuses or introductory offers that will make the product a good deal
• Read online reviews carefully, and consider those that align most closely to what you value
• Spend some time comparison shopping before finalizing your decision
• Review the fine print closely, paying close attention to fee structures and interest rates

8. Which definition best describes the FAFSA?

• The amount of money the federal government offers you in student loans
• The paperwork your bank has you complete in order to take out a personal student loan
• The paperwork you complete in order to have part of or all of your student loan debt forgiven
• The application you submit in order to determine eligibility for federal student aid

14. Which statement accurately describes the difference between a student loan and a scholarship or grant?

• Student loans always come from the Federal government, while scholarships and grants always come from the college
• Student loans need to be repaid, while scholarships and grants are both "gift aid" that don't need to be repaid
• Student loans are a result of completing your FAFSA, while scholarships and grants are a result of winning contests
• Student loans are only available to a select few college students each year, while scholarships and grants are plentiful and easy to get