Personal Finance 3200, Test 2

What is the end balance for this check register? (Diagram chart)

$1,899.25

Amar owes $2,000 on his credit card. Based on the terms of his credit card agreement, he must pay a minimum of 5% of his credit card balance. How much will Amar's minimum payment be at the end of the month?

$100

Sachi borrowed $7,000 to purchase a used car. The total amount she will need to pay includes the $7,000 she borrowed, $2,400 interest, and $250 loan fees. What is the finance charge on Sachi's loan?

$2,650

Sae wanted to buy a t-shirt for $45. She chose to wait for the t-shirt to go on sale instead. Fortuitously, she did not have to wait long. Her shirt went on sale the very next week for $10. How much did Sae save on the price of her shirt and sales taxes by waiting one week. The sales tax in her state is 9%.

$38.15

Mohammed had $750 in his checking account when his debit card was stolen. Assuming the thief made $525 in purchases with the card, how much could he save by reporting the stolen ATM card within 2 business days rather than waiting more than 2 business days but lass than 60 bays before reporting the theft?

$475 ($50 fee)

Taj obtained a $1,000 loan to be paid back at the end of 1 month (30 days). The lender quoted Taj a $200 fee. What is Taj's APR on this loan?

243%

Approximately _________ U.S. households are unbanked or underbanked.

34 Million

Which of the following could incur fees and penalties on a checking account?

A.) A consumer asks the financial institution to not honor a particular check. B.) The account holder uses an ATM not owned by the financial institution. C.) The account balance falls below a set minimum amount. D.) All of the above****

A loan consists of what elements?

All the above (Principal, Interest, Loan fees)

A finance charge represents the total amount of what elements?

Both interest and fees

Tips to minimize the possibility of someone using your cards in a fraudulent manner include:

Both reconciling statements monthly and shredding copies of receipts.

A ______ is simply your written order to your bank to pay a third party.

Check

__________ represents something of monetary value that can be sold in the event that loan payments are not made by the borrower.

Collateral

Which government branch creates the federal tax law?

Congress

What represents the total amount of credit lines available compared to how much is used?

Credit utilization ratio

Jorge and Alana want to keep $320,000 in cash equivalents that are federally insured. They could accomplish this by:

Dividing it equally in two different joint accounts in two different federally insured saving banks.

Money set aside for unforeseen circumstances is often referred to as having a(n):

Emergency fund

True of False: The IRS does not know how much I've earned if I do not file my taxes.

False

True or False: Federal Insurance Contribution Act (FICA) taxes are applied on levels of income.

False

True or false: All installment loan lenders disclose to credit applicants the interest rate (as an APY) and the finance charge (in dollars)

False

True or false: FICO scores range from 350 to 850.

False

True or false: I will have limited liability for unauthorized drafts from my banking account if I report the said transaction within 90 days.

False

True or false: My best choice of credit card is the option that was solicited to me.

False

True or false: The Federal Reserve currently insures up to $250,000 worth of loses per person in an individual account at any one banking institution.

False

Most working adults will pay the following types of taxes over the course of a year:

Federal income taxes, payroll taxes, and sales taxes

Ebun lives in a country where all citizens pay the same tax rate regardless of income. What type of tax system does her government have?

Flat tax system

Sarah is single. However, due to a personal family matter, Sarah has been responsible for taking care of her brother. Sam, her brother, is under the age of 18, has no earnings, lives with his sister and is fully supported by her. When Sarah files her taxes, what filing status should she choose?

Head of Household

The Federal Trade Commission provides step by step directions on how to file a claim for __________.

Identity theft

With what type of loan does the borrower receive the full amount of the loan upfront in a single lump sum?

Installment loan

Which of the following refers to the government agency that is charged with collecting and enforcing tax laws?

Internal Revenue Service (IRS)

How quickly you can access cash is referred to as:

Liquidity

The ______ the APR, the______ the true cost of credit.

Lower, Lower

Examples of revolving credit include:

MasterCard

The most popular alternative loan is a(n):

Payday loan

Individuals should file their taxes, even if not required due to their income, based on the following reasons:

Prevent tax fraud and a possibility of receiving a tax refund.

How often should self-employed individuals pay their taxes?

Quarterly

Which of the following is NOT a component of one's credit score:

Rental Payment History

The following form of taxation occurs whenever a person spends their money on a good or service.

Sales taxes

Unsecured loans are sometimes to regard to as a ______ loans.

Signature

Which of the following refers to financial obligations imposed on individuals and businesses by government entities?

Taxes

True or False: Property taxes are only paid once a year.

True

True or False: Sales tax is considered to be a regressive tax for low income households.

True

True or False: The IRS does not want you to take full advantage of any deductions, credits, or any other favorable tax treatment that might be available and beneficial to you.

True

True or false: A borrower does not need an 850 credit score to receive the best interest rate from a lender.

True