It's Your Paycheck

In what situation would it be beneficial to use a rent-to-own agreement to buy a television?

Ethan is on a temporary three-month work assignment in New York, living in a furnished apartment, but has no television.

If a checking account begins the month with a balance of $35.00 and over the month has debits of $150.00 and credits of $175.00, the balance at the end of the month is ____.

$60.00

Who pays FICA taxes?

Employees pay the FICA tax and Employers pay the FICA tax.

What is false concerning a bank savings account?

It isn't legal for companies to require employees to use direct deposit.

Which of the following cannot be classified as an expense?

Money your aunt Martha paid you for mowing and raking the lawn this week.

Which of the following is not a step that can help you establish and maintain a good credit history?

Open many credit card accounts.

The FICA tax is used to fund:

Social Security and Medicare.

Which loan is likely to have the highest Annual Percentage Rate (APR)? All of the loans are $500 and include a finance charge of $20.

Term of 5 days

Which of the following is not an advantage to using credit?

can cost more than paying cash

When bankers examine factors such as level of income, length of time on the job and how much debt the borrower has relative to income, which of the C's are they considering?

capacity

Which of the following is not one of the three C's of Credit:

capital

When bankers examine factors such as willingness to repay the debt and the borrower's reputation for paying bills and debts based on past behavior, which of the C's are they considering?

character

An asset the creditor can take if the borrower doesn't repay the debt is called _______

collateral

Wages are:

found by multiplying an hourly pay rate by the number of hours worked

People invest in human capital by:

going to school, pursuing additional training, developing skills.

When calculating the Annual Percentage Rate, it is important to consider

interest charge, amount of loan, term.

Compound interest is:

interest computed on the sum of the original principal and accrued interest

Which of the following is not a key element of a contract?

legal objective

A W-4 Form is:

used by employers to determine the amount of income tax to withhold from employees' earnings.

Which of the following is not recorded on your credit report?

your income

If you were to deposit $1,000 into an account that paid 10 percent interest compounded semiannually, how much money would you have in the account one year from now?

$1,102.50 ($1,000 x .05 = $50; $1,000 + 50 =$1,050; $1,050 x .05 = $52.50; $1,050 + $52.50 = $1,102.50)

Why is it important to balance bank accounts?

. To make sure you did not make a mistake in your record keeping, To make sure the bank did not make a mistake in their record keeping, To make certain that mistakes do not lead to overdraft fees.

Emma borrowed $300 to repair her car. The finance (interest) charge on the loan was $20, and the term on the loan was 14 days. What was the APR for Emma's loan?

174 percent

When rollover fees are included, what have studies found is often the range for the annual percentage rate of payday loans?

390 percent to 780 percent

If you deposited money in a savings account that paid 1% interest, approximately how long would it take your money to double?

72 years

What percentage of borrowers is unable to repay their payday loans?

91 percent

What describes a healthy budget?

A healthy budget is one in which income is greater than expenses.

On average, which of the following people is likely to earn the largest income?

A person who earns a Master's degree

A poor credit score can result in:

All of the above can result from poor credit history.

Which transactions should not be included in a budget?

All transactions should be included in a budget.

Which of the following statements is an effective budgeting behavior?

Balancing your bank accounts.

Which of the following is true of check-cashing services?

Check cashing services charge hefty fees for cashing paychecks.

Which of the following is not one of the three credit bureaus?

CreditCo

Human capital includes which of the following?

The knowledge that people possess, The talent that people possess, The skills that people possess

Which of the following is true of productivity?

The most effective way to continually increase productivity is to work harder, More productive workers tend to earn higher incomes, An increase in human capital can increase productivity, Productivity is measured as the ratio of output per worker per unit of time

Which of the following statements is not true concerning rent-to-own agreements?

The rent-to-own store must tell you the APR of the loan.

The risk-reward relationship says:

There is a direct relationship between risk of loss of principal and expected rate of return.

Which of the following is not a credit right?

Understand that if a deal sounds too good to be true, it probably is.

Which of the following statements is false?

a. A credit is a deposit to a checking account. b. A debit is a withdrawal from a checking account. c. An overdraft is a fee your bank charges you for opening a checking account. d. Taking money from your account with an ATM card is a debit. C.

Gross pay is.

the amount earned before deductions or taxes are taken out.

In a typical rent-to-own agreement, if a renter misses a payment,

the renter is required to return the item and has nothing to show for the money spent.