Unit 15 Review

Match each type of automobile insurance to its definition:

a

b

c

Liability

Comprehensive

Collision

Suppose you are playing volleyball and while diving for a ball, you collide with one of your teammates. You twist your knee and are rushed to the emergency room. At the hospital, they take X-rays, consult a knee specialist, and give you a brace for your knee. You pay a $100 co-pay at the time of service, and the ER bills your insurance company for the rest. The total hospital bill is $4,580. The table below shows the payment structure for your health insurance policy. Assuming that the injury occurred in August, what is the total amount that you will have paid for health-related issues after you pay the hospital bill? Be sure to include your monthly insurance premiums through August, the ER co-pay, and the deductible.

• A) $5,000

• B) $100

• C) $4,680

• D) $2,200

Suppose a light pole falls on your house during a storm and causes $8,000 worth of damage to your garage. The premium for your homeowner's insurance is $200/month, and your deductible is $7,000 with an out-of-pocket maximum of $15,000. If this event is a covered event, how much will you need to pay a contractor for the repairs?

• $2,400

• $7,000

• $8,000

• $15,000

Match each type of life insurance to its definition:

a

b

c

Term life

whole life

universal life

Suppose you borrow $32,000 at 15% APR for a 12-year term to be paid monthly. Your monthly payment is $592.85. How much of the first payment goes toward interest?

• $400.00

• $592.85

• $192.85

• $88.93

Based on the same scenario as above, how much of your first payment goes toward the principal?

Remember: Interest = $400

Monthly payment = $592.85

• $400

• $192.85

• $592.85

• $92.85

Suppose you own a home worth $250,000 and property taxes come due at the end of the year. If your property tax rate is 1.3%, about how much should you set aside each month to be prepared to pay this bill at the end of the year?

Property Value x Tax Rate (as a decimal) = Total Taxees Due

Annual Taxes / 12 months = Monthly Tax Amount

• $2,500

• $250

• $3,250

• $271

Suppose you own a home worth $190,000 and your property taxes will be due in 7 months. So far, you have not saved anything for your taxes. If your property tax rate is 1.5%, how much should you set aside each month to be prepared to pay this bill when it comes due?

Property Value × Tax Rate (as a decimal) = Total Taxes Due

Annual Taxes ÷ 7 months = Monthly Tax Amount.

• $2,850

• $407

• $238

• $190