Pfi 2
Ted has budgeted to pay $50 each month on his credit card which has a $2,598 balance and has an annual finance rate of 19.8%. How many years will it take him to pay off the card?
10
After graduating from college, Tina has to start repaying her $110,000 in loans. Assuming the annual interest rate is 6.5% over a 10 year repayment period, what will be the monthly loan payments?
1249.02
The average college graduating senior will have $4,138 in credit card debt. At the national average rate of 14.73%, what will the monthly payment have to be to pay off the debt in 3 years? (Assume no further charges on the card).
142.90
Wesley wants to buy a new Ford Focus. The sticker price on the model he is interested in is $18,571. Wesley has done his homework and knows that the dealer cost on this car is 15% lower than the sticker price and the best deal he can negotiate is 3-4% above the dealer cost. Approximately what price should Wesley be at when he finishes his negotiation?
16,300
Leonardo is ready to purchase a house that costs $300,000. He wants the minimum LTV to avoid PMI. He qualifies for a 30-year fixed-rate loan at 4.5%, what is the total finance charges? (Choose the answer that is closest to the correct answer.)
197,800
Joanne has a choice between two mortgages. Option 1 is a 15-year fixed mortgage for $300,000 at 3.5% APR and Option 2 is a 30-year fixed mortgage also for $300,000 at 5.5% APR. In terms of the finance cost (i.e., total cost of the loan), how much cheaper is Option 1 compared to Option 2?
227,175.55
Paul has budgeted to pay $80 each month on his credit card which has a $2,818 balance and has an annual finance rate of 15.9%. How many years will it take him to pay off the card?
4
As an independent student Sally borrowed $4,000 her first semester of college through an Unsubsidized Stafford loan at 6.8% APR, compounded monthly. After her first semester, Sally was able to work her way through school and she graduated three years later without any additional loans. Since Sally did not make any loan payments while she was in school, what is her loan balance upon graduation?
4902.36
What is the monthly payment on a $20,500 auto loan with 9% annual interest paid over 3 years?
651.89
Chris has an outstanding credit card balance of $1438.59. His credit card has an APR of 23.99% and he would like to have a zero balance two years from now. How much should he pay each month to reach this goal?
76.05
In order to avoid having to pay private mortgage insurance (PMI), you need to have a loan-to-value ratio of?
80%
Cienna purchased a new car for $29,000, she put $4,000 down and financed the rest through a 3-year car loan at 10% APR. What is her monthly car payment?
806.68
After graduating law school Amy has to start repaying her $110,000 in loans. Assuming the annual interest rate is 7.5% over a 20 year repayment period, what will be the monthly loan payments?
886.15
Which of the following should be considered when choosing a credit card?
All of these The grace period Whether or not there is an annual fee. The APR
Which education loans typically have the highest interest rates?
Alternative private Student Loans
Why do many borrowers prefer conventional mortgages?
Because they offer fixed monthy payments for the life of the loan, so homeowners can budget more easily.
Credit scores can be used by:
Employers Insurance providers Mortgage brokers All of these
Which of the following apply to getting a cash advance with a credit card?
Cash advances are available at ATM machines. You begin paying interest immediately. There may be a cash advance fee. The interest rate may be higher than on regular purchases. All of the above
Preshopping research for new vehicles should focus on:
all of the above
Credit card costs can include:
annual fees interest charges transaction fees all of the above
Perkins loans:
are subsidized loans
Which of the following student loans can be taken out by both graduate students and parents of undergraduate students?
PLUS
Which of the following is incorrect about credit scores?
Payment history weights 12%
Which of the following is incorrect about credit scores?
Payment history weights 28%
PITI payment includes:
Principal Interest Tax Insurance All of the above
Which of the following statements is/are correct?
Renting is the most expensive way of acquiring the regular use of a vehicle. Renting a car makes sense when you are flying out of town. Renting a car makes sense when you don't have to drive regularly. All of the above.
Which of the following is false regarding credit card ownership?
Researchers have shown that the average credit card purchase costs 112% of the cash price
Aiden has been offered two choices to finance his new $25,000 car, and he needs help knowing which to take. One option is a 6.5%, 48-month loan, and the other option is a 7.5%, 36-month loan. Assume no down payment. Which of the following is true? Helpful tip: You will want to calculate and make note of the monthly payment and total cost of the loan for both financing options.
The 4-year loan has smaller monthly payments, but a higher total cost
Natalie has been offered the two choices to finance her new $35,000 car, and she needs help knowing which to take. One option is a 7.5%, 48-month loan, and the other option is a 4.5%, 36-month loan. Assume no down payment. Which of the following is true? Helpful tip: You will want to calculate and make note of the monthly payment and total cost of the loan for both financing options.
The 4-year loan has smaller monthly payments, but a higher total cost
Which of the following factors makes a person attractive as a borrower?
The borrower has a great credit score The borrower has a stable employment The borrower has a stable residence The borrower offers sufficient collateral All of the above
Which of the following factors makes a person attractive as a borrower?
The borrower has lived at the same place for 15 years
Credit cards usually have lower interest than other types of installment credit.
false
Identity theft is an issue that most people don't have to worry about.
false
Identity theft is often quickly resolved once you find out about it.
false
Using your credit cards for cash advances is a relatively cheap way to borrow money because you usually do not start paying interest until the next billing period.
false
When negotiating with a car dealership, a potential buyer should always avoid disclosing which of the following:
Your affordable monthly payment
Which of the following statements is correct?
Your credit score is calculated based on your credit report.
________ is when a borrower is allowed to temporarily stop making student loan payments for a qualified reason such as unemployment or economic hardship.
deferment
Compared to purchasing a home which of the following is NOT an advantage of renting?
higher responsibil;ity
A federal direct subsidized loan has tremendous advantages over other types of loans, including:
interest is deffered while you are in school
Which of the following factors makes a person less attractive as a borrower?
offers no collateral
Which of the following areas contributes the most to calculating your credit score?
payment history
Which of the following student loans is based on exceptional financial need?
perkins
A potential buyer should avoid starting negotiations with automobile sales staff by establishing ______.
their affordable monthly payment
Compared to a lot of other states, leasing a car in Texas is a great deal because of the sales tax advantage.
true
People with high credit card balances still need to invest money on a regular basis.
true
The CARD Act of 2009 prohibits credit card companies from issuing credit cards to individuals under the age of 21 without proof of income or a cosigner who is over the age of 21.
true
Susan has three credit cards - 1) an Old Navy card she got her last year of high school and now doesn't use that much, 2) a Visa card she got while in college and pays a $50 annual fee for benefits she doesn't use that much, and 3) a Mastercard she opened last month which has no annual fees. Susan has decided that she only needs two credit cards, which one should she get rid of?
visa
Lucas wants to purchase a home that costs 185,000. He wants to take out a mortgage for $165,000. Is it likely that Lucas will have to pay PMI along with his monthly PITI payment?
yes
Renting a car may make sense if:
ypu are flying out of town
