25 Credit and Finance Quiz -A

Credit is the present use of future income that allows consumers to ________.

• purchase goods and services

• save more money

Tags

127.14(4)

A Finance charge is the total amount a borrower must ________.

• save before borrowing

• pay back in addition to the borrowed amount

Tags

127.14

Interest is the price paid for the ________.

• use of money

• borrowing books

Tags

127.14(4)

APR stands for Annual Percentage Rate, which is the rate of interest a borrower would have to pay to use a given amount of money for ________.

(a)  

• one year
• 3 months
• 10 days

A Grace period is the number of days allowed to make a payment without incurring any ________.

• interest

• reward

Tags

127.14(4)

A Revolving charge account allows customers to pay for purchases in full each month or ________.

• pay a fixed amount each month regardless of the balance

• carry over a balance with interest

Tags

127.14(4)

An Installment account is used to charge expensive items such as a major appliance or piece of furniture. The buyer pays for the merchandise according to a set ________.

• down payment

• schedule

Tags

127.14(4)

Collateral is something of value held by the creditor in case you are unable to repay the ________.

(a)  

• loan
• credit

A Cosigner is a responsible person who signs a loan agreement with the borrower. By signing the agreement, the cosigner promises to pay the loan if the ________.

• borrower repays the loan in full

• borrower defaults on the loan

Tags

127.14(4)

Equity is the difference between how much is owed on something and how much that item is ________.

• worth
• borrowed