Standard 6: Consumer Spending

If you buy a new car for $40,000 and it depreciates 25% the first year and 17.5% the second year, what is your car worth at the end of the second year?

• $26,250

• $24,750

• $30,000

• $23,000

How much does a new car depreciate in the first year?

• 25%

• 10%

• 30%

• 17.50%

How much should you spend on a car?

• You are OK spending 20-30% of your paycheck

• Less than 15-20% of your paycheck

• Less than 6-10% of your paycheck

• No more than 5% of your paycheck

Karina was thinking about buying a new car and asked you what the biggest cost would be? Since you aced finance class, you tell her the biggest cost is?

• Depreciation

• Fuel

• Interest

• Insurance

What type of vehicle would typically have higher repair costs on a yearly basis?

• Certified Pre-owned car (owned)

• Used car (owned)

• New car (leased)

• New car (owned)

When buying a new car, you typically have higher

• Maintenance costs

• Fuel costs

• Depreciation (indirect cost)

• Repair costs

It is often better to rent instead of buying a home when you only plan living there for?

• 3 yrs or less

• 4-5 years

• 6-7 yrs

• It is always better to buy a home instead of renting

What is it called when a business prices an item below cost to get consumers in the store to buy other items?

• None of the above

• Loss Leader

• Clearance Sale

• Promotional Sale

If Jill's income is $6,000/mo and she currently has $800/mo in other debt payments, how much monthly payment towards a home loan would the bank likely be willing to issue as a mortgage for a home purchase?

• $2,160.00

• $1,680.00

• $1,360.00

• $880.00

If you don’t put 20% as a down payment on a home purchase, the lender will require you to carry _____ to protect themselves financially.

• Property Insurance

• Life Insurance

• Private Mortgage Insurance

• Liability Insurance