A1.F-IF.B.4 How can debt increase a person’s net worth?

Debt allows you to buy valuable assets, like a house

The more debt you take on, the higher your credit score

Using debt, you can spend more than you earn

Debt increases your liabilities, like your credit card balance

A1.F-IF.B.4 Frank and Jasmere are each shopping for a new car for themselves. Each will need a $20,000 loan that they will pay back over a five-year period. Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE?

Jasmere's monthly payment on the loan will be about $100 more than Frank's payment

Over the five-year period, Jasmere and Frank will pay the same amount for the car loan

Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment

Lenders are not allowed to charge people different interest rates based on their credit scores

A1.F-IF.B.4 It is illegal for a lender to do all of the following, EXCEPT…

Charge someone a high interest rate (above 20% APR) on a credit card

Discourage someone from applying for a home loan based on their race

Publish someone’s credit report publicly online

Change the terms of someone’s loan without notifying them

A1.F-IF.B.4 What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?

Consolidate multiple debts into one new loan

A1.F-IF.B.4 Who tracks all of your credit information?

Credit reporting agencies (Equifax, Experian and TransUnion)

Consumer Financial Protection Board (CFPB)

A1.F-IF.B.4 What does the term “buy, borrow, die” describe?

The pattern where high-interest loans trap people in a cycle of debt

The strategy used by wealthy Americans to leverage debt to minimize taxes

The necessity of using debt to achieve common milestones, like buying a house

The long-term nature of repaying large debts

A1.F-IF.B.4 You find an error on your credit report: Your credit card account indicates that you are 60 days late on your payment but you have bank records indicating that you have always made on-time payments. What should you do FIRST?

Contact the credit card company to have them fix it

Contact the credit reporting agency

Wait a few weeks to see if it gets resolved

Call the police to report the possible identity theft

A1.F-IF.B.4 Which of the following statements about bankruptcy is TRUE?

It decreases your credit score significantly

It is the recommended first step if your debts exceed 30% of your income

It stays on your credit report forever

It eliminates all of your debts for free

A1.F-IF.B.4 What does a credit counselor do?

Provides low-cost financial advice and creates debt management plans

Decides whether or not the bank should issue a loan to someone

Collects debts that are owed to creditors and over 180 days late

Co-signs loans to minimize financial risk for a borrower

A1.F-IF.B.4 Which best describes the Debt Snowball method for paying off debt?

Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance

Only make payments on your smallest debt first, then move on to your second smallest debt, and so on

Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track

Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the highest balance

A1.F-IF.B.4 Which of these represents a potential consequence of neglecting to pay your federal student loans?

Wages or tax refunds can be garnished

A1.F-IF.B.4 What benefits do you receive by taking out a loan with a cosigner?

You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit

You don’t get penalized for late payments

You get a discount on future loans after this one is paid off

You automatically get the same credit score as the cosigner once the loan is paid off

A1.F-IF.B.4 You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a NEGATIVE impact on your credit score?

Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."

Joanie says, "Call the auto lender and see if you can negotiate a lower monthly payment or some other deal."

Angie says, "Pick up a second job for as long as it takes to accumulate enough money to make all your payments, even if it means losing time with friends and family."

Betty says, "Cut down to a bare bones budget, where your necessities and your debt repayments take first priority. Cut everything non-essential."

A1.F-IF.B.4 Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ?

You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card

Accessing credit only becomes more expensive as you get older

Negative marks on your credit report go away faster for younger borrowers

Credit scores are free for anyone under the age of 25

A1.F-IF.B.4 Review this partial credit report, and then choose the response below that accurately depicts the information on the report.

This borrower was 30 days late on their May 2015 payment

The borrower paid a $30 fee in February 2015

This borrower was never late with any of their credit payments

This borrower's most recent payment was $30

A1.F-IF.B.4 The amount you can charge to a secured credit card is limited by…

The amount of money you deposit into an account as collateral

The total amount of money across all your bank accounts

How long you’ve had an account with the bank

A1.F-IF.B.4 How can your credit score impact your financial well-being?

Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be

Only consumers with high scores are approved for credit

Consumers with low scores get lower interest rates on loans than those with high scores

It generally has no impact on your financial situation

A1.MP.2 Which of the following statements is TRUE about the value of a college degree?

A college graduate can expect to earn, on average, more than a high school graduate over a career

A high school graduate can expect to earn about the same as a college graduate

Every college graduate can expect to have a starting salary over $60,000 right after college

A college graduate typically earns less than someone with a high school diploma for the first 10 years

A1.MP.2 Which of these options lists the types of financial aid from MOST attractive to LEAST attractive?

Grants/Scholarships, Work-study, Federal loans, Private loans

Private loans, Federal loans, Work-study, Grants/Scholarships

Work-study, Grants/Scholarships, Federal loans, Private loans

Federal loans, Grants/Scholarships, Work-study, Private loans

A1.MP.2 Which of the formulas below correctly calculates net price?

Sticker price - grants and scholarships = net price

Sticker price - student loans = net price

Grants and scholarships + student loans = net price

Sticker price + grants and scholarships = net price

A1.MP.2 Who receives and uses the information submitted in your FAFSA?

The schools you’ve applied to and your state government to determine your eligibility for financial aid

Your employer to see if you’ll still be able to work while attending college

Your parents to keep track of your progress at college

The federal government for tax purposes

A1.MP.2 What types of money are used in paying for college and in what order should you use them?

Free money, your money, borrowed money

Your money, borrowed money, free money

Borrowed money, your money, free money

Your money, free money, borrowed money

A1.MP.2 Although it’s not a type of financial aid, how can transferring credits from a community college help save you money on college costs?

It reduces amount of credits you’ll have to pay for at your 4-year college

Colleges will pay you for any credits transferred from a community college

The cost of community college credits can be deducted on your taxes

Transferring credits from a community college makes you eligible for lower interest rates when taking out federal student loans

A1.MP.2 Janelle's family earns about $60,000 per year. She has been accepted to College A and College B and is comparing their financial aid packages. College A has a sticker price of $28,000 and net price of $12,000. College B has a sticker price of $60,000 and net price of $9,000. Which statement below is FALSE?

It will cost less to attend College A

College B is providing Janelle more grants and scholarships

College A has a lower sticker price than College B

It will cost less to attend College B

A1.MP.2 All of the following are strategies to reduce the cost of attending college, EXCEPT…

Live on campus to reduce the costs associated with commuting to classes every day

Attend an in-state college that typically has lower tuition costs for residents of that state

Spend your first two years at a community college then transfer your credits to a four year college

Participate in dual enrollment programs while in high school to reduce the number of classes you need to take in college

A1.MP.2 Who is eligible to receive Direct Subsidized loans?

Students enrolled less than half-time

A1.MP.2 What is a 529 plan?

An investment account used to encourage saving for college expenses by offering tax incentives

A fixed-rate savings account offered by banks specifically for setting aside money for college tuition, without tax advantages

An insurance plan that covers the costs of college in the event that you need to use that money for an emergency

A federal grant program that provides need-based financial aid to college students, requiring no repayment

A1.MP.2 Typically, when should you first file the FAFSA?

October or November of your last year of high school

After you finish freshman year of high school

After you receive your Student Aid Index

Once you are ready to start repaying your student loans

A1.MP.2 Your school counselor is a great resource for all of the following EXCEPT…

Negotiating lower interest rates with your lenders

Providing information about scholarships and grants you wouldn’t be able to find elsewhere

Suggesting specific scholarship and grant opportunities based on your personal strengths and accomplishments

Comparing different colleges, their costs of attendance, and financial aid offers

A1.MP.2 Which of the following is TRUE about the Student Aid Index (SAI)?

The lower your SAI the more financial aid you are eligible for

The higher your SAI the more financial aid you are eligible for

The lower your SAI the less financial aid you are eligible for

Your SAI does not impact how much financial aid you are eligible for

A1.MP.2 Keith's tuition, room & board, and fees for freshman year total $26,000. Including scholarships, grants, and federal student loans, his financial aid package is $25,500. Which option below is both realistic and the most financially responsible?

Keith should pick up a part-time job to cover his remaining costs and personal expenses

Keith’s financial aid package covers all of his necessary costs, so there is no need for him to do anything else

Keith should take out a private loan and limit himself to $8000 in other expenses freshman year

Keith should not attend this college because he cannot afford it

A1.MP.2 As you make decisions during college, you should focus on…

Balancing your academic, social, and financial decisions to make the most out of the entire experience while setting yourself up for success post-college

Minimizing your student loan debt at all costs

Having fun, because you’re only in college once

Focusing entirely on your studies to maximize your GPA

A1.MP.2 You will find each of the following pieces of information on your FAFSA Submission Summary EXCEPT…

a record of all scholarships you have applied for

a record of the answers you submitted on your FAFSA

your eligibility for federal student aid

A1.MP.2 Which of the following is a benefit of an income-driven repayment plan?

Theoretically, your payment should never be more than you can afford

You will pay the least amount of interest over the life of the loan when compared to other loans

They’re structured to be paid off in 5-10 years

Even if you start to make more money, your monthly payments won’t change

A.1.5-CP.A.1 Soft skills can be best described as...

Skills that allow a person to work effectively with others

Skills that are easy to demonstrate and measure

Skills that apply only to a specific position

Skills that are unimportant to employers

Financial Algebra - Fall Final 2024

Authored by Tiffanie Flores

Mathematics

12th Grade

CCSS covered

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75 questions

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MULTIPLE CHOICE QUESTION

1 min • 1 pt

A1.F-IF.B.4 Theo has significant debt and is considering filing for Chapter 7 bankruptcy. He should try all of the following strategies before filing for bankruptcy, EXCEPT…

Meeting with a credit counselor

Paying a debt settlement company

Using a debt repayment strategy, like the Snowball or High Rate Method

Setting up a debt management plan

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A1.F-IF.B.4 What are the two most important factors in calculating your credit score?

Payment history and types of accounts

Amounts owed and length of credit history

Payment history and total debt

Length of credit history and new credit inquiries

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A1.F-IF.B.4 Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…

Reducing spending by canceling some of her streaming subscriptions

Taking extra shifts at work to increase her income

Making more than the minimum required payment on her debt

Applying for another credit card to use in case she runs out of cash paying off her debt

A1.F-IF.B.4 All of the following would show up on a credit report, EXCEPT...

Salary of your current job

Payment history of your car loan

Credit card payment history

Student loan activity

A1.F-IF.B.4 What is the difference between Chapter 7 and Chapter 13 bankruptcy?

Chapter 7 bankruptcy is for individuals; Chapter 13 bankruptcy is for corporations

Chapter 7 bankruptcy sells your assets; Chapter 13 bankruptcy allows you to keep assets if you follow a repayment plan

Chapter 7 bankruptcy only eliminates student loan debt; Chapter 13 bankruptcy eliminates all your debts

There is no meaningful difference; both Chapter 7 and Chapter 13 bankruptcy clear your debts by selling off your assets and stay on your credit report for 10 years

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A1.F-IF.B.4 Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score?

Cancel his credit cards

Make on-time payments

Get a car loan

Check his credit score

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A1.F-IF.B.4 Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?

Always say "credit" when asked "credit or debit?" at a store

Ask his parents to cosign a credit card or add him as an authorized user on their credit card

Any time he borrows money from a friend or family member, be sure to pay it back promptly

Take out some private student loans, even though he doesn't need them because he has grants and scholarships

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