Cost of Credit Notes Quiz

What is credit based on the expectation of?

• Immediate payment

• Repayment in the future

• Gift without repayment

• Exchange of goods

Interest associated with credit is a charge for what?

• The privilege of lending money

• The privilege of borrowing money

• The privilege of saving money

• The privilege of investing money

What is a credit limit?

• The maximum amount of money you can save

• The maximum amount of money you can invest

• The maximum amount of money you can borrow

• The maximum amount of money you can lend

What should credit cardholders do to avoid late fees and maintain good credit history?

• Pay the minimum payment each month

• Pay the entire balance each month

• Pay twice the minimum payment each month

• Pay only the interest each month

Personal loans typically have a ______ term.

Easy access loans are characterized by what kind of interest rates?

How many months will Peter be making payments for his car?

• 24 months

• 48 months

• 60 months

• 72 months

Is the total repayment more or less than the original amount Peter borrowed?

• More, because of added interest

• Less, because of added interest

• More, because of a discount

• Less, because of a rebate

What is the total amount of interest Jill will pay for her vacation if she uses a credit card with an 18% interest rate and makes payments of $110.02 each month for 12 months?

• $120.24

• $1,320.24

• $1,200.00

• $110.02

How much will Brady pay in total for his student loans with a 3.3% interest rate after 5 years?

• $20,000.00

• $21,723.00

• $362.05

• $1,723.00