WorksheetsTypes of Credit & Modeling Functions
Total questions: 38
Worksheet time: 19mins
Each of the following is an installment loan(pay per month), except for a(n) ___________, which is a revolving line of credit(means it changes per month).
Keon plans to buy a new GMC Sierra for $47,000 at 5.5% APR. Which financing option would have the lowest total interest?
In order to take out federal student loans, you need to…
Which of the following is an example of a secured debt (involves collateral)?
Which of the following best describes a Schumer box?
What is the main difference between an annual interest rate and an annual percentage rate (APR)?
For most American households, the largest source of debt is:
If you fall behind on your loan payments, all of the following are recommended steps, EXCEPT…
All of the following affect the monthly payment amount of a mortgage EXCEPT…
Mason takes out $2700 in Direct Subsidized student loans during their first semester of college. Which of the following statements is true?
What is one way to guarantee you don’t pay interest on your credit card?
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?
Moto has a $7000 credit card balance, and he cannot afford to pay it all off at once. The larger his monthly payments…
May is taking out student loans to pay for college. Why might she take out private student loans in addition to federal student loans?
In a fully-amortized loan, which statement is true?
Nasir just got a letter from his credit card company 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...
Which of the following scenarios could be accurately represented with the following recursive sequence?
Jay’s store credit card offers a special financing program. The fine print states that if he does not pay his balance in full in 2 years, he will have to pay interest on his original purchase balance at 22.93% APR compounded daily. If Jay purchases a $2200 TV and makes no payments for 2 years, what will his balance be? Use your calculator and the formula above.
(a)
What is the benefit of using an online calculator amortization over using the compound interest formula to calculate the total cost of the loan?
Missy was provided the following information about a loan which she used to set up the following compound interest calculation. What error did Missy make? Look at the formula above to help you.
A loan backed by collateral
Unsecured Loan
Secured Loan
What does APR stand for in the context of loans and credit cards?
Annual Percentage Rate
Average Personal Return
Annual Payment Requirement
Account Payment Ratio
What does APR stand for in the context of loans and credit cards?
Annual Percentage Rate
Average Personal Return
Annual Payment Requirement
Account Payment Ratio
Zoe received a credit card offer in the mail with the bold print "0% A.P.R. for New Accounts." Which important piece of information should she find before thinking about signing up?
Can I get two or more cards with this offer?
Can I pay my credit card bill online?
What is the A.P.R. after the introductory period?
What kind of designs can I get on my card?
As you will see from this agreement, there are different A.P.R.s applied based on how the credit card is used. Which transaction type has the highest A.P.R.?
A.P.R. triggered by a late payment
A.P.R. applied on Purchases made during the Introductory Period
A.P.R. applied to a Balance Transfer
A.P.R. applied to a Cash Advance
An arrangement to receive cash, goods, or services now and pay for them in the future.
Credit
Asset
Interest
APR
What is the main purpose of using a credit card responsibly?
To spend money you don't have
To earn rewards and build a good credit history
To pay for emergencies only
To avoid using cash
What is a 'Credit Score'?
The maximum amount of credit a borrower can use
A yearly charge for credit card usage
A measurement of someone's creditworthiness
An initial cash payment for a large purchase
Select all the statements that are true
Credit score is a number that shows how good we are at paying back the money we have borrowed
Banks look at our credit score before they decide on whether to give us a loan or not
People with a good credit score are charged a higher rate of interest
Banks cannot refuse to give us a loan even if we have a low credit score
Why is it important to have an emergency fund?
To cover unexpected expenses without going into debt
To spend on vacations and luxury items
To invest in the stock market
To lend money to friends
A prediction of how likely you are to pay a loan back on time based on information from your credit reports.
Credit Score
Loan Score
Debt to income ratio
Standard loan
Which of the following is NOT a benefit of using cash instead of credit?
It can help you avoid debt
It limits your spending to what you have
It builds your credit history
It helps with budgeting by making spending more tangible
Which of the following is a good debt repayment strategy?
Paying only the minimum amount due each month
Ignoring your debts until you are in a better financial situation
Paying off the debt with the highest interest rate first
Taking out another loan to pay off your debt
Going directly to a car dealer for a loan to keep things simple is a...
great idea because they want you to get the car so it'll be the best offer.
not great because they typically offer higher interest rates.
great idea because you don't have to deal with another lender.
not great because car dealers don't offer loans.
