Module 2 Review EPF

Eric recently graduated from college and has a goal of woning his own home by the time he is 30 years old. What tool should he be using to help him plan how to spend his money?

• credit card

• budget

• Mutual fund

• Amortization calculator

What is the recommended percentage of your monthly income that should be devoted to housing?

• 20%

• 40%

• 30%

• 50%

the goal of budgeting is to make sure that you are spending money on things that you can afford. If you are spending more money than you earn, what economic situation exists for you?

• deficit

• surplus

• negative credit

• foreclosure

What category would your electricity bill that varies each month fit in?

• variable expense

• gixed expense

• assets

• debt

Which of the following is a component that would MOST likely be found in a budget for a 65 year old but not for a 25 year old?

• long term care insurance

• mortgage

• student loans

• car insurance

Which of the following would you need if you decided to rent a place to live rather than purchase it?

• renter's insurance

• mortgage

• bank loan

• homeowner's insurance

If interst rates are currently at 3.5% and the bank offers you a loan that is guaranteed at 2.5% for the first 5 years that cannot go higher than 8%, what type of morgage have you taken?

• adjustable rate mortgage

• fixed mortgage

• lease

• reverse mortgage

What is an advantage of taking a 30 year fixed mortgage compared to other options?

• higher amount of principal paid each month

• less interest paid to the bank

• lower homeowner's insurance costs

• lower montyly payment

Which of the following is NOT a service provided by banks?

• make car loans

• make martgage loans

• sell groceries

• financial planning

Yoshiro has been hired by a local fast food restaurant. His new boss tells him to bring a voided check with him to sign paperwork so that he can be paid. What bank product will he be signing up for?

• direct deposit

• credit check

• savings account

• certificate of deposit