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Credit Unit

Total questions: 24

Worksheet time: 12mins

Name
Class
Date
1.

What is credit?

a)

Free money

b)

Borrowed money

c)

Standard of living

d)

A term that causes tears

2.
The Cost of Credit
a)
Money
b)
Interest
c)
Term
d)
Grant
3.
The amount it costs you a year to use credit, expressed as a percentage.
a)
Deferement
b)
Credit
c)
APR 
d)
Lease
4.
A yearly charge for the privilege of using credit.
a)
Interest
b)
Credit
c)
Money
d)
Annual Fee
5.

Sources of credit include all of the following except:

a)

Credit Card

b)

Student Loan

c)

Car Loan

d)

Savings Account

6.
A credit card is a source of free money.
a)
True
b)
False
7.
Money that you have to pay every year for using a credit card.
a)
Yearly Fee
b)
Anniversary Fee
c)
Annual Fee
d)
Term Fee
8.
What does APR stand for?
a)
Annual purchase rate
b)
Annual percentage rate
c)
Approximate payment rotation
d)
Authorization processing rate
9.
How old to you have to be to apply for a credit card?
a)
21
b)
18
c)
16
d)
25
10.
Why do banks charge interest on loans?
a)
Banks don't want people to borrow money
b)
Interest is how banks make money
c)
Interest encourages people to borrow money
d)
Banks want customers to be able to pay their bills
11.
A loan that federal government pays the interest on while you are in school
a)
Subsidized Loan
b)
Unsubsidized Loan
12.
Which of the following are benefits of having a credit card?
a)
Emergency
b)
Convenience
c)
Reservations
d)
All of the above
13.

The actual dollar cost of using credit

a)

Annual Fee

b)

Finance Charge

c)

APR

d)

Interest

14.

How long the loan lasts

a)

One Year

b)

APR

c)

Loan Term

d)

Interest Rate

15.

Car Lease includes

a)

Higher payments

b)

Unlimited mileage

c)

Limited mileage

d)

All of the above

16.

Financial aid that does NOT need to be repaid

a)

Unsubsidized Student Loan

b)

Subsidized Student Loan

c)

Real Student Loan

d)

Grant

17.

Borrowed money for undergraduate and graduate studies that must be repaid with interest

a)

Student Loan

b)

Grant

c)

Option

d)

Note

18.

The Department of Education pays the interest while student is in school and during grace and deferment periods

a)

Subsidized Loan

b)

Unsubsidized Loan

c)

Car Loan

d)

Mortgage

19.

FAFSA

a)

Federal Aid for Former Student Application

b)

Free Application for Federal Student Aid

c)

Former Aid for Federal Students Available

d)

Form Available for Federal Student Aid

20.

What is the maximum amount of you take home pay that should go to credit payments (excludes housing)?

a)

20%

b)

33%

c)

50%

d)

25%

21.

Rate of interest on a loan that is tied to a stated index and changes annually every July 1 as the index changes.

a)

Long term interest

b)

Fixed interest

c)

Short term interest

d)

Variable interest

22.

Principal x Rate x Time (PRT or PIT)

a)

The formula to calculate a car payment.

b)

The formula to calculate interest.

c)

The formula to calculate mortgage payment.

d)

The formula to calculate taxes.

23.

Maximum amount of your take home pay that should go to your home payment or rent.

a)

50%

b)

20%

c)

33%

d)

25%

24.

The borrower is responsible for interest during the entire life of the loan

a)

Unsubsidized loan

b)

Subsidized loan

c)

Short term loan

d)

Long term loan