Consumer Skills Financial Literacy Test Questions

Which of the following will be paid for as part of the escrow funds included in a mortgage loan?

• a. Car insurance
• b. Principal on home loan
• c. Property tax
• d. Home warranty

When one is seeking to purchase a product at a store, what additional cost must be paid in addition to the listed price of the product?

• a. Insurance
• b. Interest
• c. Purchasing fee
• d. Sales tax

Which of the following best describes the concept of APR?

• Summary of all credit card transactions in one month
• The maximum amount one can charge on their credit card
• The fee charged if a credit card payment is late
• The credit card interest rate, calculated on a yearly basis

What is the term used to describe interest earned on interest gained?

• Compound interest
• Simple interest
• Principal
• Capital

Which of the following types of mortgage loan helps individuals who may have a low credit score, little cash available for a down payment, and could be a first-time home buyer?

• Adjustable-rate loan
• Fixed-rate loan
• Government-insured loan
• Jumbo loan

When one party to a contract does not do what the contract requires, the individual has committed a what of the contract?

• Breach
• Consideration
• Ratification
• Treaty

Which of the following is the correct sequence in the formation of a contract?

• Offer, acceptance, agreement, consideration
• Agreement, consideration, offer, acceptance
• Offer, agreement, acceptance, consideration
• Offer, acceptance, consideration, agreement

Which of the following positions can confirm signatures to a contract?

• Executive
• Legal signer
• Notary public
• Trustee

Sales tax amounts are generally established by which of the following?

• State and local rates
• Federal and state rates
• Federal and local rates
• Business and federal rates

If the value of one’s house increases, all the following will most likely rise EXCEPT:

• House insurance
• Escrow payment
• Mortgage principal
• Property tax