Topics Consumer Finance

Emily’s parents put $1,500 in her bank account for college tuition. At an interest rate of 8.25% compounded semiannually,what will be the balance after 18 years?

• $6,273.50  

• $6,314.08

• $6,385.72

• $6,427.94

Kennedy won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded quarterly, how much interest will she earn in 10 years?

• $915.59

• $933.28

• $979.81  

• $1,005.09  

A _____ is probably the biggest loan one can have

• Mortgages

• Loan

• Credit

• Amortization

6a. Natalie and Andrew Prior are examining their payment schedule for their $280,000 mortgage. The mortgage was for 15 years and had an APR of 3.375%. What was the Prior’s monthly mortgage payment?

• $2,023.26

• $1,984.53

• $1,742.15

• $1,880.72

What is amortization?

• The process of paying off a debt through irregular payments that only include interest.

• The process of paying off a debt in a lump sum at the end of a fixed period of time.

• The process of gradually reducing or paying off a debt over a fixed period of time through regular payments that include both principal and interest.

• The process of increasing or adding to a debt over a fixed period of time through regular payments that include both principal and interest.

You want to buy a house that is valued at $215,000. You are putting 15% down. What is the down payment? What is the loan amount?

• $15; $214985

• $3225; $211,775

• $32,250; $182,750

The charge of borrowing money

• Credit Total
• Introductory Rate
• Interest
• Penalty APR

The maximum amount you may borrow on a credit card is known as:

• creditworthiness
• credit report
• credit limit
• variable rate of credit

How can a cardholder avoid paying interest on a credit card?

• Do not pay anything

• Pay the minimum payment after its due date

• Pay the balance in full every month

• Pay the minimum balance every month

Which of the following statements below is TRUE about the credit card statement?

• If the cardholder pays $523.20 by the due date on the bill, she will pay NO interest to the credit card company.

• The cardholder is carrying a balance over from the last period.

• The cardholder was charged interest on her balances for the last period because she made her payment on time.

• If the cardholder makes her minimum payment of $35.00 by the due date, she will NOT be charged interest on her balances.