WorksheetsUnit 5 EOU Review
Total questions: 28
Worksheet time: 16mins
1. You receive a promotional email for a new rewards card stating "0% interest for the first 6 months." What crucial detail should you check before applying?
A. Can I apply for multiple cards with this deal?
B. Is online bill payment available for this card?
C. What will the interest rate be after the initial 6 months?
D. Are there different card colors to choose from?
2. While reviewing a loan agreement summary, you notice the interest rate is listed as 5.5% - 18.5%. Which of the following statements is accurate?
A. If a range of interest rates is shown, most borrowers receive the lowest rate
B. Your credit history is a major factor in determining your loan's interest rate
C. Borrowers prefer higher interest rates because they earn more
D. Interest rates on loans are typically fixed and won't change during the loan term
3. Which of these loan repayment methods would result in you paying the MOST interest overall?
A. Paying 25% of your loan balance each month on time
B. Paying off your loan in full every month
C. Making only the minimum payment (5% of your loan balance) each month on time
D. Making only the minimum payment (5% of your loan balance) each month with occasional late payments
4. Which of the following steps can assist individuals in building and preserving an excellent credit rating? (Select all that apply.)
A. Consistently making loan payments by their due dates.
B. Keeping outstanding balances on credit cards under 30% of the available limit.
D. Frequently checking credit reports for mistakes or discrepancies.
F. Sustaining a lengthy track record of prudent credit management.
C. Rapidly opening several new lines of credit.
5. All of the following financial tools can assist in establishing a credit record EXCEPT.
A. Student loan
B. Prepaid card
C. Auto loan
D. Store credit card
8. Which of the following statements best describes why it's beneficial to pay more than the required monthly payment on a car loan?
A. Each time you pay extra, the lender will slightly lower your interest rate.
B. Additional payments go toward the principal balance, helping you pay off the loan faster.
C. Extra payments are used to cover interest charges, reducing the total cost of the loan.
D. Car loans usually have higher interest rates than personal loans, so it's wise to focus extra payments here.
9. Olivia has $4,500 in personal loan debt with an interest rate of 20% APR and a $100 minimum monthly payment. She also has a part-time job that allows her to contribute up to $250 each month toward debt repayment. She wants to pay off the debt as quickly and efficiently as possible while still covering essential living expenses. Which of the following repayment strategies is most effective for Olivia?
A. Make only the minimum monthly payment and use the rest of her money for non-essential spending.
B. Pay the full $250 each month toward her debt to reduce interest paid over time and shorten the payoff period.
C. Skip a few payments now and pay more later when she has more income.
D. Open a new loan to transfer the balance and continue making only minimum payments.
10. Brian and Dana each buy a condo in the same complex for $320,000. Brian's monthly mortgage payment is $350 more per month than Dana's. Which of the following statements would explain the difference?
A. Brian chose a shorter term for his mortgage, so his monthly payments are higher
B. Dana has a lower credit score, so her interest payments are also lower
C. Brian made a larger down payment, so his monthly payments are also larger
D. Dana's interest rate is higher, so her monthly payment due is also lower
11. Why can frequently using store charge cards for routine purchases lead to accumulating long-term financial obligations, even if you consistently pay the minimum amount due?
A. Paying only the minimum lets interest build up on the leftover balance, causing the total owed to grow over time.
B. Store card providers impose extra fees for everyday use, resulting in increased debt.
C. Store card balances are erased after a set time, but interest still applies to other accounts.
D. Using store cards for daily purchases reduces your available credit, which automatically raises the debt total.
13. Brianna needs to pay for urgent dental work to keep her job, but she doesn't have an emergency fund or enough money in her account to cover the $975 bill. Which option below is likely the WORST financial decision to solve her problem?
A. Take out a personal loan from her bank
B. Borrow money from a family member
C. Put the dental bill on her credit card
D. Take out a payday loan
14. Michael is considering buying a $25,000 motorcycle. Which financing option would have the LOWEST expected monthly payment and the HIGHEST expected total interest payments?
A. $0 down payment, 5% interest, 48 months
B. $0 down payment, 5% interest, 72 months
C. $2500 down payment, 5% interest, 48 months
D. $2500 down payment, 0% interest, 24 months
15. Which of the following is most likely to represent a fixed rate, secured loan?
A. A home mortgage
B. A personal line of credit
C. A payday loan
D. A bank financed motorcycle loan
16. Which of the following is a major distinction between borrowing from a credit union and borrowing from a cash advance service?
A. Credit union loans generally feature lower interest rates and longer repayment periods than cash advance loans.
B. Cash advance services require a higher income level than credit unions to approve a loan.
C. Credit union loans are restricted to certain uses, while cash advance loans are only for urgent expenses.
D. Cash advance services provide larger loan amounts than credit unions for extended financial needs.
17. The two most influential elements in determining your financial trustworthiness score are….
A. Record of payments and category of account
B. Total balances and duration of financial history
C. Record of payments and total balances
D. Duration of financial history and recent account openings
18. Michael has a credit card with a credit limit of $5,000. He currently has a balance of $1,500 on the card. What is his credit utilization percentage?
A. 10%
B. 20%
C. 30%
D. 50%
19. Which of the following is a possible reason why an individual might avoid opening a savings account, even if they have access to one?
A. They prefer using digital wallets and payment apps
B. They think banks impose excessive charges for their services
C. They aim to improve their financial reputation
D. They like receiving bonuses on their deposits
20. Which of the following actions can help you start building a credit profile before you finish college?
A. Always choose "credit" instead of "debit" when making purchases at stores
B. Begin making small payments on your student loans during university, even if repayment isn't required yet
C. Whenever you borrow money from relatives or friends, make sure to repay them quickly
D. Make sure to deposit part of your earnings into a savings account rather than a checking account
21. Alex and Priya are both shopping for a new motorcycle. They are looking for a $15,000 loan to pay for the motorcycle that they will pay back over a four year period. Alex has a credit score of 750 and Priya has a score of 620. Which of the following statements is TRUE?
A. Over the four year period, Priya and Alex will pay the same amount for the motorcycle loan
B. Alex's monthly payment on the motorcycle loan will be about $80 more than Priya's payment
C. Priya's monthly payment on the loan will be about $80 more than Alex's payment
D. Lenders are not allowed to charge people different interest rates based on their credit scores
22. You have a store loyalty card and want to know the best way to use it to maximize your rewards points. Which action will have the MOST significant effect?
A. Regularly use less than 30% of your available points and redeem them in full each month before they expire
B. Always let your points accumulate without redeeming them
C. Only redeem the minimum number of points required each month
D. Never use the loyalty card at all
23. Which of the following best explains how the Fair Credit Reporting Act (FCRA) safeguards individuals?
A. It stops credit agencies from collecting any personal data.
B. It mandates that credit bureaus provide clear information about credit reports and consumer rights.
C. It ensures automatic approval of all credit applications.
D. It permits consumers to erase any negative credit information at will.
