WorksheetsPF Unit 7 Types of Credit & Modeling Functions Unit Assessment
Total questions: 30
Worksheet time: 26mins
Which of the following are an installment loan?
Auto loan
Credit card
Mortgage
Student loan
Keon plans to buy a new GMC Sierra for $47,000 at 5.5% APR. Which financing option would have the highest total interest?
60-month term and $2,000 down payment
60-month term and $3,500 down payment
36-month term and $3,500 down payment
36-month term and $5,000 down payment
In order to take out federal student loans, you need to:
Have a credit score above 600
Complete and submit the FAFSA
Choose a repayment plan before enrolling
Take out at least $6000 in private student loans
An auto loan will be considered a (a) debt.
Which of the following best describes a Schumer box?
The portion of your monthly credit card bill that lists the minimum monthly payment due
The portion of your credit card agreement that lays out the important rates and fees
The portion of your credit card application that asks for your income and employment status
The portion of a plastic credit card that holds the magnetic stripe or chip
What is the main difference between an annual interest rate and an annual percentage rate (APR)?
APR is the interest rate combined with guaranteed fees
APR is almost always lower than the interest rate
Interest rate is for loans, while APR is for credit cards
Interest rate is money you earn on investments, while APR is money you pay for debt
Match the following debt types with their descriptions:
Student loans
Debt incurred for education
Credit cards
Debt from revolving credit used for purchases
Medical debt
Debt arising from medical expenses
Mortgages
Debt secured by real estate property
If you fall behind on your loan payments, all of the following are recommended steps, EXCEPT:
Calling your lender to negotiate a payment plan that fits your needs
Reducing your spending to divert additional income towards loan payments
Putting your past due loan payments on a credit card
Find additional sources of income to help catch up on past due payments
All of the following affect the monthly payment amount of a mortgage EXCEPT: (a)
Mason takes out $2700 in Direct Unsubsidized student loans during their first semester of college. Which of the following statements is true?
Their loans will immediately start accruing interest once taken out
Their loans will start accruing interest after graduation
Their loans will enter repayment after one year
Their loans will enter repayment when they start their first job
What is one way to guarantee you don’t pay interest on your credit card?
Pay your entire balance in full every month
Pay your minimum monthly payment on time
Spend less than your credit limit
Only make new purchases every other month
After much shopping, Kelli found a car she’d love to buy. When it comes time to talk about financing, the salesperson at the dealer says, 'I can offer you 6% on $24,000 for 5 years.' What do each of those numbers mean?
6% is the term, $24,000 is the down payment, 5 years is the interest rate
6% is the term, $24,000 is the interest rate, 5 years is the principal
6% is the interest rate, $24,000 is the term, 5 years is the principal
6% is the interest rate, $24,000 is the principal, 5 years is the term
Moto has a $7000 credit card balance, and he cannot afford to pay it all off at once. The larger his monthly payments...
The longer it will take to pay it off and the smaller total interest he'll pay
The longer it will take to pay it off and the larger total interest he'll pay
The shorter it will take to pay it off and the smaller total interest he'll pay
The shorter it will take to pay it off and the larger total interest he'll pay
May is taking out student loans to pay for college. Why might she take out private student loans in addition to federal student loans?
She is ineligible for some federal student loans due to her parents' low credit scores
She wants her private student loan balance to be forgiven under the Public Service Loan Forgiveness program
She needs more funding than is available through federal student loans
She wants to take advantage of the lower interest rates offered by private student loans
In a fully-amortized loan, The principal portion of your payment (a) and the interest portion (b) over time
Nasir just received a letter from his credit card company stating that the terms of his agreement are changing. In the fine print, he notices that his interest will now be compounded daily instead of monthly. Nasir expects that his total interest will...
Increase due to more frequent compounding
Decrease due to more frequent compounding
Stay the same because the compounding frequency has no effect on interest
Increase by an additional $365
17. Match the following scenarios that could be accurately represented with the following recursive sequences
f(0)=8500; f(n)=(1+120.04)⋅f(n−1)−157
An $8500 loan with a 4% annual interest rate, compounded daily
f(0)=8500; f(n)=(1+3650.04)⋅f(n−1)−157
f(0)=8500; f(n)=f(n−1)+157
f(0)=8500; f(n)=f(n−1)−1578500
When working in a spreadsheet, what symbol is used to create an absolute reference, a cell that will never change no matter where you move the formula?
$
@
&
%
What is the benefit of creating your own amortization spreadsheet over using the compound interest formula to calculate the total cost of the loan?
An amortization table is more accurate than the compound interest formula that often produces incorrect results due to approximations
An amortization table shows more details about how your payments change over time than the compound interest formula
An amortization table involves fewer numbers and variables than the compound interest formula
An amortization table takes less time to set up and learn how to use than the compound interest formula
Write the compound interest formula:
Principal: $2400
Interest Rate: 4.75%
Compounded: Monthly
Term: 5 years
Type what comes after A=
What is the primary advantage of using a fixed-rate mortgage over an adjustable-rate mortgage?
The interest rate can decrease based on market conditions
The monthly payments can vary each year
The interest rate stays the same throughout the loan term
The initial interest rate is usually lower than that of fixed-rate mortgages
What is a common penalty for making a late payment on a credit card?
Decrease in credit limit
Reduction in the APR
Automatic account closure
Incurrence of a late fee
Which of the following best describes the term 'debt-to-income ratio'?
The ratio of secured to unsecured debt a person holds
The percentage of a person's monthly income that goes towards paying debts
The comparison of one's income to the national average
The total balance of one's debt divided by their annual income
1) People with good credit history have more financial options.
2) People with good credit history can get better interest rates on loans.
3) People with good credit history have better credit scores.
4) People with good credit history can borrow any amount of money.
The ability to borrow money
(a)
Money that is borrowed and expected to be paid back with interest
(a)
A person or organization who makes funds available to borrow.
(a)
Mr. Irons is planning to take out a loan to buy a car. At the car dealership, he must sign a statement giving
permission to check his credit report. Which statement best describes why the car dealership wants to check
his credit?
to determine if Mr. Irons is a safe driver
to decide how much money Mr. Irons earns
to determine if Mr. Irons can afford the car
to determine the likelihood of Mr. Irons paying back the loan on the car
The type of credit card issued by an oil company, bank, or department store is:
an installment card
a revolving charge card
a debit card
a cash card
An installment loan that provides money for a house
(a)
