WorksheetsFinancial Literacy Unit 4 Test
Total questions: 25
Worksheet time: 13mins
Name
Class
Date
1.
If Felicity is acquiring a 3-year loan for $10,000 at 5.6 percent, what element of the loan does $10,000 represent?
a)
principal
b)
interest
c)
term
d)
total cost
2.
Tadd is comparing loans from two different banks, each for $100,000 for 30 years. If the total cost varies by $15,000, what element of the loan is different?
a)
term
b)
interest
c)
principal
d)
time
3.
What is the BEST way to define the term of a loan?
a)
the amount of each monthly payment
b)
the amount of money being borrowed
c)
the length of time money is being borrowed
d)
the fees associated with borrowing money
4.
If Sheree has a three-year auto loan, how many monthly payments is she likely to make?
a)
3
b)
36
c)
12
d)
48
5.
The total cost of a loan is principal plus interest. What equation could be used to calculate the total interest owed?
a)
principal × interest rate
b)
principal + (interest rate × time)
c)
(principal ÷ time) × interest rate
d)
principal × interest rate × time
6.
Jess and Katie are buying a $350,000 house and they pay $70,000 and get a mortgage loan for the remainder. What does the $70,000 represent?
a)
a down payment
b)
the principal
c)
a stipend
d)
a deposit
7.
If a borrower is able to make a 30 percent down payment on a loan, it lowers the lender’s:
a)
interest rate.
b)
deposit.
c)
terms.
d)
risk.
8.
Putting a deposit down for an apartment is MOST like which of these?
a)
redeeming a coupon
b)
getting lost in the dark
c)
making a reservation at a popular restaurant
d)
receiving a gift for helping a neighbor
9.
Which saying BEST represents the concept of financial collateral?
a)
Put some skin in the game.
b)
When it rains it pours.
c)
A penny saved is a penny earned.
d)
The grass is always greener…
10.
When Amara lost her job and couldn’t pay her mortgage, what was MOST likely the result?
a)
foreclosure
b)
pre-approval
c)
repossession
d)
wage garnishment
11.
Defaulting on what type of loan MOST often results in repossession?
a)
home loan
b)
auto loan
c)
student loan
d)
credit card
12.
For what type of loan is collateral required?
a)
unsecured
b)
credit card
c)
secured
d)
student loan
13.
What is the BEST example of an unsecured loan?
a)
home equity loan
b)
business loan
c)
credit card
d)
mortgage
14.
Moira defaulted on her loan, which means she did what?
a)
paid her loan off early
b)
failed to pay back her loan
c)
got pre-approved for her loan
d)
co-signed on a loan
15.
What is TRUE about scholarships as a source of educational funding?
a)
Students must pay back the amount of the scholarship.
b)
Students must work on campus to receive the scholarship.
c)
Students do not have to pay back the amount of the scholarship.
d)
Students do not have to fill out the FAFSA to qualify for scholarships.
16.
If Marcus gets paid for working in the IT department on campus, what type of financial aid is he receiving?
a)
student loan
b)
grant
c)
scholarship
d)
work study
17.
What is the MOST likely way a student qualifies for a Pell Grant?
a)
They have a high school GPA above 3.9 and good SAT scores.
b)
They are a stellar track and field athlete.
c)
They are the first person in their family to go to college.
d)
Their parent was in the military.
18.
For students going to college, what is the FIRST step in qualifying for financial aid like scholarships and student loans?
a)
file for bankruptcy
b)
sign a contract
c)
submit a credit report
d)
fill out the FAFSA
19.
What is a disadvantage of private student loans?
a)
Students can’t get private loans, only parents can.
b)
They don’t qualify for federal student loan forgiveness programs.
c)
Students have to start making payments before graduation.
d)
They generally have higher interest rates than public loans.
20.
When he bought his first car, Casey and his mom applied for the loan together, which made his mom a:
a)
credit counselor.
b)
creditor.
c)
co-signer.
d)
lender.
21.
For what kind of loans do payments go up as the borrower’s income goes up?
a)
auto loans
b)
private student loans
c)
credit card loans
d)
federal student loans
22.
If Rishi is applying for a car loan, the lender will reach out to Experian or Equifax to get what information?
a)
Rishi’s driving history
b)
Rishi’s credit card number
c)
Rishi’s credit score
d)
Rishi’s loan pre-approval
23.
What is the LAST step Gavin should consider if he can’t pay off his debts?
a)
filing for bankruptcy
b)
talking to a credit counselor
c)
having his wages garnished
d)
finding a co-signer for his loans
24.
If Stephen’s car is repossessed because he defaulted on his loan, what is TRUE?
a)
He will get back the amount he’s paid on the loan so far.
b)
He will lose whatever money he’s paid on the loan so far.
c)
He will easily be able to get a loan for another car.
d)
He will still owe the principal of the loan.
25.
Huang is struggling to pay off his student loan and decides to get help from a credit counseling service. What benefit will a legitimate service provide?
a)
They will lower the amount that he owes.
b)
They will make the issue go away for a fee.
c)
They will negotiate with creditors.
d)
They will pay off the loan for him.
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