8.05 Unit Test: Thinking About Credit

Is this statement true or false? A finance charge is what you pay to ship a purchase.

False

Is this statement true or false? An installment plan always requires a down payment.

False

Is this statement true or false? The unpaid balance is the sum of the previous balance and the new charges.

False

Gerald bought a computer on the installment plan. The price was $1,560. He paid $82 a month for 24 months. What is his total cost for the computer?

$1,968

On Holly's credit card statement, her last balance was $102.57. She made a payment of $20, had new charges totaling $32.11, and pays a periodic rate of 1.23 percent. What was Holly's finance charge?

$1.02

What is Harry's actual finance charges?

$1.31

If Harry's unpaid balance was $112, what would have been his finance charge for the month?

$1.96

Marta borrowed $1,380 for 15 months at 13 percent APR. What will be Marta's monthly payment?

$106.95

What is Harry's actual new balance?

$113.81

On Holly's credit card statement, her last balance was $102.57. She made a payment of $20, had new charges totaling $32.11, and pays a periodic rate of 1.23 percent. What is Holly's new balance?

$115.70

Use this table to find the monthly payment. Mark borrowed $5,500 at 11.5 percent for five years. What is his monthly payment?

$120.95

Casey borrowed $814 for nine months, with payments of $105.50 monthly. What will he pay in interest?

$135.50

Use the table to find the monthly payment. Michelle borrowed $10,125 at 12.5 percent for 10 years. What was her monthly payment?

$148.33

What is the minimum amount due?

$15

Mark bought a plasma TV for $2,499 on the installment plan. He paid a down payment of $300 and agreed to pay $101.50 a month for the next 24 months. How much will he pay in all for the TV?

$2,736

Use the table to find the interest. Marta borrowed $1,380 for 15 months at 13 percent APR. How much will she pay in interest?

$224.25

Mark bought a plasma TV for $2,499 on the installment plan. He paid a down payment of $300 and agreed to pay $101.50 a month for the next 24 months. How much will Mark pay in finance charges?

$237

Elijah's credit card statement showed these items: Last Balance Payments Finance Rate New Charges $152.58 $45.00 1.5% $213.40 What is Elijah's new balance?

$322.59

If Harry's new balance was $123.40, what would be his total available credit?

$376.60

Brandi's new balance on her credit card statement was $256.38. How much is her minimum payment if it must be 15 percent of the balance?

$38.46

Frank's bank charges a variable finance rate of 1.5 percent on purchases up to $100, and one percent for purchases over $100. If his unpaid balance is $354.15 this month, what is his finance charge?

$4.04

Gerald bought a computer on the installment plan. The price was $1,560. He paid $82 a month for 24 months. What did Gerald pay in finance charges?

$408

Nasir borrowed $420 for six months with $77 monthly payments. How much interest will he pay on this loan?

$42

What is Harry's total credit line?

$500

Use the table of interest. Andrea borrowed $2,240 at 15 percent APR for 18 months. How much interest will she pay?

$504

Mark borrowed $5,500 at 11.5 percent for five years. What is the amount of Mark's total payment?

$7,257

You bought a dual refrigerator/freezer for $859 on the 12 months is the same as cash plan. The terms of the plan on the contract stated that if not paid within 12 months, you would be assessed 11.5 percent APR for the amount on the first day of the plan. If you want to pay off the $859 appliance within 12 months, how much should you budget per month for payment?

$71.58

What is Harry's unpaid balance?

$74.89

On Holly's credit card statement, her last balance was $102.57. She made a payment of $20, had new charges totaling $32.11, and pays a periodic rate of 1.23 percent. What is her unpaid balance?

$82.57

What does twelve months same as cash mean?

If you take longer, you will pay a finance charge

What is a plan where you can take the purchase home immediately, but agree to make periodic payments of a specific amount called?

Installment buying

Which of the following is a disadvantage of using a credit card?

It is very easy to charge more than you can pay off each month

When is Harry's next payment due?

June 15, 2006

What is the percentage charged each month on purchases charged to the credit card account called?

Periodic rate

What is the finance charge?

The amount of interest you pay on the unpaid balance

Mark borrowed $5,500 at 11.5 percent for five years. How much did Mark pay in interest?

$1,757

You bought a dual refrigerator/freezer for $859 on the 12 months is the same as cash plan. The terms of the plan on the contract stated that if not paid within 12 months, you would be assessed 11.5 percent APR for the amount on the first day of the plan. If you pay the appliance in 11 months, how much will you have paid?

$859.00

Diego borrowed $915 for nine months with monthly payments of $108.00. What is the amount of total payments?

$972

What is Harry's Maxi Card number?

1234-5678-9101-1121

Tim's credit card has a restriction that he must pay either 15 percent of the unpaid balance or $25, whichever is greater. Which will he pay if he has an unpaid balance of $216?

15%

Anna bought a DVR which cost $299. She paid a finance charge of $58 and paid for 12 months. What is her approximate APR?

19.4%

Use the formula to find the approximate APR. Approximate APR=(Finance Charge ÷ # Months)(12)/Amount Financed Therra bought a gold bracelet for $168. She paid a finance charge of $49 and paid over eight months. What is the approximate APR for her purchase?

43.8%

Who in this list would NOT request a copy of your credit report?

A grocery store where you are buying food

What does APR stand for?

Annual Percentage Rate

Which of the following is an advantage of using credit cards?

They are convenient

Which of the following is NOT an advantage of using credit cards?

They charge a monthly interest rate

Is this statement true or false? A credit report is a record of your debt paying history.

True

Is this statement true or false? A down payment is paid before you begin monthly payments.

True

Is this statement true or false? You calculate a finance charge by subtracting the cost of the purchase from the total payment.

True

What is the amount left when you subtract last month's payment from last month's balance on a credit card statement called?

Unpaid balance