Week 6 Quiz

Which of the following is NOT one of the 3 parts of a loan.

• Term

• Rate

• Principal

• Down Payment

What is principal?

• The amount of money that you borrow from a lender

• The percent you pay in interest

• The time period you have to pay off the loan

What is term?

• The amount of money that you borrow from a lender

• The percent you pay in interest

• The time period you have to pay off the loan

What is rate?

• The amount of money that you borrow from a lender

• The percent you pay in interest

• The time period you have to pay off the loan

What are the two types of Rate?

• APY and APF

• APR and APC

• APR and APB

• APR and APY

What does APR stand for?

• Annulled Percentage Rate

• Annual Percentage Rate

• Annual Political Raffle

• Actual Percentage Rate

Which of the following loans will have the LOWEST monthly payment?

• 5% for 30 years

• 5% for 20 years

• 6% for 30 years

• 6% for 20 years

Which of the following loans will have the HIGHEST monthly payment?

• 5% for 30 years

• 5% for 20 years

• 6% for 30 years

• 6% for 20 years

How does loan term affect the total interest paid?

• A longer loan term results in a lower total interest paid, while a shorter loan term results in a higher total interest paid.

• The loan term does not affect the total interest paid.

• A longer loan term and a shorter loan term result in the same total interest paid.

• A longer loan term results in a higher total interest paid, while a shorter loan term results in a lower total interest paid.

Amortization breaks your loan into equal monthly payments and shows the amount of your money that goes to paying _____ and the amount of your money that goes to paying_____ each month.

• Interest and payment

• Principal and payment

• Interest and principal

• none of the above