Types of Credit Unit Retake

First Name:

Last Name:

Hour/Class

Which financing option will result in the lowest total interest paid for a $47,000 GMC Sierra with a 5.5% APR?

• 48-month term and $2,500 down payment

• 48-month term and $4,000 down payment

• 24-month term and $4,000 down payment

• 24-month term and $5,500 down payment

Which of the following is an example of a loan secured by collateral?

• A payday loan

• A mortgage

• A credit card

• A personal loan from a friend

Which section of a credit card agreement details the key rates and fees?

• The section of your monthly credit card statement that shows the minimum payment due

• The section of your credit card agreement that outlines the important rates and fees

• The section of your credit card application that requests your income and employment details

• The section of a physical credit card that contains the magnetic stripe or chip

How does an annual percentage rate (APR) differ from a nominal interest rate?

• APR includes both the interest rate and additional fees

• APR is typically higher than the nominal interest rate

• Nominal interest rate applies to savings, while APR applies to loans

• Nominal interest rate is for short-term loans, while APR is for long-term loans

Which type of debt is most common among American households?

• Auto loans

• Credit cards

• Medical debt

• Mortgages

Which action should Mason avoid if he is struggling to make his loan payments?

• Contacting the lender to discuss alternative payment options

• Cutting down on non-essential expenses to free up money for loan payments

• Using a credit card to pay off overdue loan amounts

• Looking for additional income sources to cover the loan payments

Which of the following does NOT influence the monthly mortgage payment?

• Property taxes

• Loan amount

• Repayment period

• The lender's reputation