FIN 311 Test 2
The price of the car you are leasing is called the____.
capitalized cost.
Anna purchased a vehicle six years ago for $25,000. She recently sold it for $5,000. Over the years, she paid a total of $5,800 on auto insurance, $4,800 on gas and maintenance, and $2,500 in interest. What was her depreciation cost on this vehicle?
$20,000
Janie Long has a checking and savings account in a federally insured financial institution. The maximum amount of her insurance coverage is____.
$250,000
You have $450 in your checking account when you ATM card and PIN are stolen. You could lose up to____ if you report the lost ATM card within 2 business days.
$50
If you purchase a $110,000 and make a 10% down payment, how much would 1 point cost at closing?
$990
Generally, renting would be preferred to buying when_____.
-you have no money to make a down payment. -you know your job will be temporary. -you have just gone through a divorce.
Future Value of Money Formula
FV=PV(1+i)^n
A bank could advertise as "free" a checking account that requires a minimum balance of $3,000 to avoid monthly service charges.
False
What is not true of low interest rates?
Low interest rates have increased the supply of credit
How would a person who uses a credit card for purchases receive a free loan?
Pay statement balance in full on or before due date.
Debit and ATM card transactions are linked to your checking account.
True
If your bank states that it compounds monthly, the effective interest rate (APY) will be greater than the nominal interest rate.
True
With low interest rates, savers have begun investing in stock where higher yields can be found.
True
If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90 percent, then the borrower must make____.
a minimum down payment of $10,000 plus closing costs.
Cliff Cloud is a very busy person who likes to handle all his financial services needs with one account if possible. What account would be best for Cliff?
asset management account
The majority of each month payment at the beginning of the loan goes to pay____.
interest.
The financing rate on the car you are leasing is called the____.
money factor.
A fee charged by lenders as a condition of a mortgage loan that effectively raises the interest rate is called____.
mortgage points.
At the end of the lease period, you are never required to____.
purchase the vehicle at its residual value.
Earnest money is the sum of money the home buyer deposits with the____.
seller to indicate intent of purchase.