WorksheetsL11 Day 2 Car Payments
Total questions: 19
Worksheet time: 10mins
In car buying, what does the term "financing" most closely mean?
Paying extra for warranty coverage
Getting a loan or borrowing money
Negotiating the sticker price
Making cash payments only
Which statement best defines "principal" in the context of a car loan?
The total interest paid over the life of the loan
The amount of money borrowed to buy the car
The monthly payment including taxes and fees
The dealership’s required documentation fee
Select the statements that correctly describe how a down payment affects a car loan’s principal.
A down payment lowers the amount you need to borrow.
A down payment increases the loan amount to cover fees.
A down payment can reduce the principal because you use saved money upfront.
A down payment always eliminates interest charges.
A student has saved $2,000 and uses it as a down payment when purchasing a car. Which outcome aligns with the material’s explanation?
The principal increases by $2,000 because savings are spent
The principal decreases because less money needs to be borrowed
The interest rate automatically becomes zero
The monthly payment never changes
Which pair of terms are presented as meaning essentially the same thing in this context?
Financing and borrowing money
Principal and interest
Down payment and sales tax
Loan term and APR
Which option correctly distinguishes principal from interest in a car loan?
Principal is the borrowed amount; interest is the cost of borrowing.
Principal is the dealership fee; interest is the sales tax.
Principal is the monthly payment; interest is the car’s price.
Principal is the warranty cost; interest is insurance.
When might the principal on a car loan be lower according to the material?
If the buyer makes a down payment or uses saved money
If the buyer refuses to finance
If the dealership offers free maintenance
If the car is bought at night
Which statement reflects the role of "financing" during car buying as explained?
Financing is the process of setting the car’s sticker price.
Financing is arranging a loan to pay for the car.
Financing is paying taxes and registration fees.
Financing is choosing an insurance plan.
Choose all statements that match the provided definitions.
Principal refers to the amount borrowed, also called the loan amount.
Financing refers to borrowing money to purchase the car.
A down payment raises the principal to cover extra fees.
Savings used upfront can lower the principal.
Based on the material, which action most directly reduces how much you need to finance for a car?
Extending the loan to a longer term
Making a down payment with saved money
Adding options and accessories to the car
Waiting for a holiday sale
In car financing, what does the term note refer to?
The total price of the car before tax
Your monthly car payment
The final balloon payment at the end
The dealer’s quoted sticker price
Which phrase best describes APR in the context of a car loan?
Only the interest rate charged on the principal
The interest rate plus any extra fees bundled together
A government-set maximum interest rate
The amount of interest paid each month
What does loan-term mean in a car loan agreement?
The size of your down payment
The length of time you have to pay back your loan
The amount of interest charged annually
The total fees added by the lender
Select all statements that correctly match the car loan vocabulary defined:
Note means your monthly car payment.
APR is the interest rate plus bundled fees.
Loan-term is the length of time to repay the loan.
APR is the amount of interest you paid last month.
A lender advertises an APR of 7% that includes origination and documentation fees. Based on the provided definitions, what is being represented by this APR?
Only the base interest rate without fees
The interest rate plus extra fees bundled together
The total cost of the car including taxes
The loan-term measured in months
If a borrower chooses a 60-month loan-term, what is the most accurate interpretation using the definitions provided?
They will pay the loan off in five monthly payments.
They have five years to repay the loan.
They must pay the entire balance in 60 days.
They only pay interest for 60 months and principal later.
Which vocabulary item connects to the timing of repayment rather than the price or fees?
APR
Note
Loan-term
Down payment
In a conversation at the dealership, someone says, “Your note will be $325.” Using the vocabulary provided, what does this mean?
Your total loan amount is $325.
Your monthly car payment is $325.
Your APR is 3.25%.
Your loan-term is 325 months.
Which pair is correctly matched according to the given vocabulary?
APR — final payment due at loan maturity
Note — interest rate quoted by the lender
Loan-term — length of time to repay the loan
Note — total fees added to the loan
