Personal Finance Midterm

If you borrow $100 at 10 percent simple annual interest and repay it in one lump-sum at the end of one year, you will repay:

$110

Jerry Allison starts the month with a balance on his credit card of $1,000. On the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card of $500. The bank charges 1.5 percent interest per month using the previous balance method. What would Jerry's finance charges be for the month?

$15.00

Your bankcard has an APR of 18% and there is a 2% fee for cash advances. The bank starts charging interest on cash advances immediately. You get a cash advance of $600 on the first day of the month. You get your credit card bill at the end of the month. What is the total finance charge you will pay on this cash advance for the month? Assume each month has 30 days.

$21.00

Natasha and Al received a statement reporting that they paid $8,000 in mortgage interest during the past year. If they are in a 28 percent tax bracket, this deduction may reduce their taxable income by

$8,000

Ownership of an individual housing unit in a building is commonly called:

A condominium

Which of the following statements about a legal aid society is not true? A. It is a publicly supported organization. B. It is part of a network of community law offices. C. It is a for-profit organization. D. It provides legal assistance at minimal cost or without charge. E. It provides legal assistance to people who cannot afford their own attorney.

C. It is a for-profit organization.

Which of the following is least likely to affect the timing of purchases to help you obtain bargains? A. Changing mortgage rates B. Hurricane season C. Time zones D. Crop failures E. Political elections

C. Time zones

One of the drawbacks of borrowing from parents or family members is that such loans: A. are legally prohibited from establishing repayment dates and terms. B. are limited to oral agreements. C. may create tension within the family. D. tend to be more expensive than other types of loans. E. must be interest-free.

C. may create tension within the family.

Which home improvement is least likely to increase the value of your home? A. Energy efficient features B. A remodeled kitchen C. An extra bathroom D. An exercise room E. A converted basement

D. An exercise room

The Federal Trade Commission enforces the:

Fair Debt Collection Practices Act.

Membership in credit unions has been:

Growing steadily.

Anthony Newton wants to buy a new sail boat. He makes a down payment of $10,000 which represents 20% of the value of the sail boat he is purchasing. In which way is Anthony reducing his lender's risk?

He is taking a larger stake in the asset he is purchasing.

The Homeowners Protection Act requires that a PMI policy be terminated automatically when a homeowner's equity reaches _____ percent of the property value at the time the mortgage was executed.

22%

An increasing number of personal bankruptcy filers are baby boomers, who now account for what percent of bankruptcies?

60%

Private label products are those that:

are sold by one chain of stores.

The process of resolving consumer complaints with the use of a third party whose recommendations are non-binding is called:

Mediation

Sloane owes $2,600 on her car loan. According to Edmonds Used Car Prices, her car is valued at $1,950. The term used to refer to this situation is:

Negative Equity

Patricia Newton is going to buy a new car, and she needs to apply for a loan to cover the purchase. She knows she can get a loan for up to 6 years, but she would prefer a shorter-term loan. She selects a 4-year loan. Patricia reducing her lender's risk by:

Repaying the loan faster

Which one of the following is an advantage of buying?

Tax benefits

Which federal law, passed in 1969, requires creditors to state the cost of borrowing in common language?

Truth in Lending Act

CCCS counseling is:

Usually free

If you find that you cannot make your payments, the first thing you should do is:

contact your creditors and try to work out a modified payment plan with them.

The purpose of small claims court is to:

resolve minor consumer complaints.

Frank West wants to borrow money for three years to purchase a new boat. He has been offered a seven percent fixed rate loan and also a variable rate loan that has an initial rate of five percent. By choosing the variable rate loan, Chuck is reducing the lender's risk by:

sharing the interest rate risk.

The assessed value of your home is the:

value used to calculate property taxes.