U4L1-2 HW Finance

1. The details of any loan will include the following 3 components:

1. a) The principal, the interest rate, and the loan term

2. b) The money you pay, the money the lender pays, and the principal

3. c) The mortgage, the auto loan, and the small business loan

4. d) The loan amount, the credit card payment, and the statement

• a

• b

• c

• d

2. Why are secured loans considered less risky to the lender?

1. a) Lenders are allowed to conduct background checks for secured loans

2. b) Lenders can take valuable collateral if you fail to repay your loan

3. c) Lenders give secured loans all the time, so they're more comfortable doing them

4. d) Lenders can check your credit score before giving a secured loan, which they can't do for an unsecured

• a

• b

• c

• d

3. Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to…

1. a) Decrease your principal

2. b) Decrease your interest rate

3. c) Increase your term

4. d) Increase your total payments

• a

• b

• c

• d

4. Each of these statements describes a variable rate loan EXCEPT...

1. a) Typically starts with a lower interest rate than a fixed rate loan

2. b) Is riskier to the borrower because the interest rate could increase substantially

3. c) Is almost always a better option

   1. d) Can increase or decrease the interest rate over the course of the loan

• a

• b

• c

• d

Which age bracket carries the most credit card debt?

• 30-39

• 40-49

• 60-69

• 70+

Which age bracket has the lowest amount of mortgage (home loan) debt?

• 18-29

• 20-29

• 50-59

• 70+

Which age bracket has the most auto loan debt?

• 30-39

• 40-49

• 18-29

• 20-29

Which of these is not an asset?

• value of your home

• auto loan

• cash

• retirement accounts

My net worth is determined by taking the grand total value of my assets minus my ________.

An auto loan is considered an i__________ loan.