Unit 6: Money Management Test Review

What's the main factor in determining whether you are approved for a loan and what the interest rate on that loan will be?

• Age

• Credit Score

• Gender

• Mortgage

Which type of account allows for the money you have already earned to be the most easily accessible for making purchases?

• checking
• savings

• retirement

• credit card

True or False: Using a credit card for small regular purchases that you pay off at the end of each month will HELP your credit.

• True

• False

True or False: Putting a credit card in a drawer instead and never using it is a great way to raise your credit score.

• True

• False

1. You should use less than ____% of the credit limit on a credit card to ensure you don't negatively impact your credit score.

• 30

• 25

• 20

• 15

Amortized Loans...

• Pay more in principal than interest at the beginning of a loan.

• Pay more in interest than principal at the beginning of a loan.

Paying more than the monthly amount due for an amortized loan is...

• A good idea because it will pay off all the interest you owe first and then let you focus on paying the principal.

• A bad idea because it pays down the principal faster, extending the life of your loan.

• A good idea because it pays down the principal faster, shortening the life of your loan.

• A bad idea because it will limit the interest you pay over the long run.

1. The reduction in the value of an asset over time...

• Depreciation

• Appreciation

• Amortization

• Interest

How soon should you report fraudulent activity on your credit card to try attempt to get all your money back?

• ASAP - Before any charges are processed.

• Within 24 hours

• Within 5 business days

• By the end of the calendar year

When creating a budget, which of the following is NOT recommended?

• Review and adjust your budget regularly

• Include both fixed and variable expenses

• Base your budget on your gross income

• Set realistic financial goals