finalll

For every $100 borrowed how much do lenders charge as a fee for using their money?

$15-$30

Estimate the cost of your loan if the amount of the loan is 15,000 and the term is 5 years and the APR is 6$%. Now estimate the monthly payment for the loan.

$15.000 x 5 x 0.06 = $4,500 $4,500 + $15,000 = $19,500 $19,500 / 60 = $325

Jeff is trying to decide whether to purchase a new Laptop with rent-to-own contract or an installment loan. Prime Electronics has the exact Laptop he wants for $958. Jeff can get a two-year installment loan from the store at a18% interest rate. Jeff wants to shop around so he finds the same Laptop at Ray's Rental Services for $19.88 per week. Jeff talks with the assistant manager of Ray's Rental who tells him that he could own the Laptop in 125 weeks. Jeff is paid bi-weekly in his current job so this sounds good to him so far. The assistant manager also states that if Jeff misses one payment, then the Ray's Rental would take back the Laptop. Jeff tells the assistant manager thank you for his time but he wants to do a little more research before making a decision. Jeff then goes back to Prime Electronics and talks with a sales associate about the same Laptop. The associate informs Jeff that his monthly payment would be $54.20. How much would be Jeff's total amount paid for the Laptop at the Ray's Rental Service? What is the total amount Jeff would pay for the Laptop at Prime Electronics assuming he made all his payments on time and did not pay any extra? How much would the Laptop cost if Jeff saved his money and paid cash? If Jeff chooses the rent-to-own option and makes 75 payments on time but then misses a payment because he has to fix his car. What happens next? How much money did Jeff lose in total because he missed one payment? Compare the amount of money Jeff wound pay in a 1 month period (4weeks) at Prime Electronics for installments at 18% to Ray's Rental for the rent-to-own plan? How much money would he save if he chooses to buy the Laptop from Prime Electronics? Compare the total amount paid to own the Laptop from Prime Electronics on installment plan to Ray's Rental on rent-to-own plan. How much money would he save in total if he chooses the installment plan? How much would Jeff save in total if he paid cash instead of making monthly payments to Prime Electronics? What are some advantages of Jeff choosing to buy the Laptop from Prime Electronics instead of Ray's Rental Service? Of the possible 3 forms of payment discussed in this situation, which one would save Jeff the most money?

1. $2,485 2. $1,300.80 3. $958 4. Ray's Rental will take back the Laptop 5. $1,491 6. $25.32 7. $1,184.20 8. $342.80 9.Saved money each month Saved money on total to own laptop Pay off Laptop soon (24 months vs. 31 months) Would not lose Laptop because of 1 missed payment (late fee) 10. Cash

1. Jessie has a monthly net income of $800. His fixed monthly expenses consist of $150 for rent. He currently pays $80 each month for a credit card bill, and now he wants to buy a car. What does Jessie have left in his budget for a car payment to stay within his safe debt load? 2. Dominik has a monthly net income of $1,860. His fixed monthly expenses consist of a rent payment of $450. He is paying off a student loan of $95 per month. Dominik would like to buy a new flat screen television set using a retail credit card. What is the largest monthly payment Dominik can afford for the television set so that his credit card payment and student loan keep him in the recommended safe debt? 3. Jan has a net salary of $3,722 each month. Her fixed monthly expenses consist of $500 for rent. She also makes a monthly car payment of $299, not including her monthly car insurance premium of $173. Are these payments within Jan's recommended safe limit?

1. He has zero dollars left in the safe debt load. 2. He has $91 to keep him in the safe debt load. 3. No, it is not in her limit. She would be in $99.8 left in debt.

According to the article we read, what were four ideas give to help avoid getting a payday loan?

1. Take care of your Four Walls first. 2. Sell anything that isn't nailed down. 3. Cut any extra spending. 4. Don't go into any more debt. 5. Find a side job that will make you some quick money. 6. Make a budget. 7. Get on the Baby Steps.

Bank Register Information: 1. On May 26, your balance is $527.96. 2. On May 27, you write check # 107 to your landlord, Mrs. Wilson for $226.00. 3. On May 28, you use your debit card at Foodland for $22.52. 4. On June 1, you write a check for $156.32 to Bank of Illinois for your car payment. 5. On June 1, you realize your check to the Bank of Illinois should have been for $165.23, so you void the first check and write a new check for $165.23. 6. On June 2, you write a check to Interstate Phone Service for $62.77. 7. On June 2, you use your ATM card to withdraw $20.00. 8. On June 15, your paycheck for $425.00 is automatically deposited. 9. On June 15, you use you check car at Gifts Plus to buy a $18.99 birthday present for your mother. 10. On June 15, you write a check for $246.45 to State Ranch to cover car insurance premium. 11. On June 22, you transfer $100.00 online from your checking account to your savings account. 12. On June 24, you use your debit card at Gas Up to fill up your car. You spend $12.88. 13. On June 28, you use you ATM card to withdraw $30.00 form your checking account. Questions: 1. What was your account balance on May 30? 2. Could you have paid your car insurance payment on June1 instead of June15? Explain why. 3. Your best friend's birthday is coming up. You found the perfect gift. It costs $21.99. Can you afford to buy the gift on June 2? What will your account balance be if you do? 4. What was your account balance after you withdraw $30.00 on June 28? 5. What was the amount of check #111, to whom did you write it, and for what?

1. The account balance on May 30 was $279.44 because they had not spent more until June first. 2. No, I could not pay it on June first because I would be in debt after the check it the bank. 3. Yes, I will barely be able to afford it because I am getting paid on the 15th. I will have 9.45 dollars left after I pay for the gift. 4. My account balance was $48.12 on June 28. 5. It was to State Ranch for $246.45 to cover car insurance.

Based on the rule of 72, money earing 6 percent would take about _____ years to double.

12

Payday loans charge _____ interest of the average credit card.

20 times

The total interest earned on $100 for two years at 10 percent (compounded annually) would be?

21

You want to buy a car a year from today. You have $5.000 in a savings account with a 3% interest rate compounded quarterly. How much money will you have in your savings account in 1 year? Please show math for all 4 quarters. Round to the nearest hundredth. How long will it take your money to double with a 3% interest rate compounded quarterly?

3 months: $5,037.50 6 months: $5,075.28 9 months: $5,113.35 12 months: %5,151.69 Double in 24 years

In the 50/30/20 Budget Rule, how much of your income should be put toward things like entertainment, restaurants, gym memberships, and shopping?

30

According to the Safe Debt Load, what monthly payment can you afford for a new car and insurance? You have a net monthly income of 4,800. You have a fixed monthly income of $465 in rent, $123 in student loans and $55 for you cell phone service.

302

Which retirement plan allows a person to contribute to a savings and the employer matches contributions up to certain level?

401k

In the 50/30/20 Budget Rule, how much of your income should be put toward things like daycare, rent, groceries, and transportation?

50

Payday loans are capped at how much money?

500

Discuss 5 benefits of a full time job. Be sure to express why they are important. Remember to use complete sentences with details to support your answer.

A full time job can provide many benefits including paid time off, where you can still get paid on sick days. Full time jobs can also cover your dental insurance to pay for dental costs. Being a full time worker can give you employee discounts on the things at your work. It can cover a retirement, so you wouldn't have to worry about being financial unstable when you are older. Another benefit would be parental leave, so you could take care of your child. Health Insurance Employer Match for retirement Paid Vacation/Sick Time Life Insurance Employee Discounts

Which of the following best describes net pay?

Amount people receive after taxes and other deductions are taken out of their paychecks

Which warranty means if you buy a car and have problems, you must pay for it yourself?

As-is warranty

In which investment does the bank agree to pay the investor a fixed interest rate for a fixed amount of money during a fixed period of time?

Certificates of Deposit (CDs)

Which insurance pays for damage caused by vandalism, hailstorms, floods, and theft?

Comprehensive

Which warranty is offered and specifically written by dealer?

Dealer warranty

First, explain 4 main differences between saving and investing. Then explain why it is important to save some of your money.

Degree of Risk Rate and Stability of Return Availability of Funds for Use Amount of Protection against Inflation

A hidden job cost might include all of the following except ____

Employee discounts

Expenses that occur each month in a regular amount are called

Fixed expenses

Some things to do after a job interview include all of the following except:

Follow up with the interviewer at least every other day to make sure you are fresh in their mind

Before buying an extended warranty you should find out the following things except:

How much of the monthly gas price will it cover

The truth in Lending Act requires lender to inform borrower of all the following except:

How much per month extra it would take to pay off the loan 6 months early

What does HALT stand for?

Hungry, Angry, Lonely, Tired

What are the 3 things the video stated that you needed to receive a payday loan?

ID, bank account, proof of income

This type of warranty is always in effect unless the product is sold as-is or seller say in writing there is no warranty.

Implied warranty

It is important to make a good first impression at a job interview, therefore, be sure to do the following except:

Make sure you ask about the expected salary so that the interview knows how much you are willing to work for.

There are two types of deductions: voluntary and required. All of the following are voluntary except

Medicare insurance

What term describes the amount you must pay in order to be considered "up-to-date" with your credit card payments?

Minimum payment

Which of the following is NOT an advantage of leasing a car?

No additional costs for extra mileage

Expenses that occur several times a year are called

Periodic expenses

List the 4 ways that insurance companies use to determine the cost of your car insurance. Now give an example of each.

Personal Characteristics Age, sex, martial status, personal habits, type and frequency of car use Geographic Location Rural--usually lower rates, Urban--usually raises rates Driving Record Accident will raise Number and kind of moving violations (points on license) Vehicle Characteristics Damage, repair, and theft record of type and model of car Age of car

Secured loans are:

Protected by collateral

What are 3 possible outcomes of not paying your payday loan on time?

Rollover fee. late fee, overdraft fee

The FICA is a U.S. payroll tax used to fund which of the following?

Social Security and Medicare

What does SMART goal stand for?

Specific, Measurable, Achievable, Relevant, Timely

In this unit we discussed some reasons to have a budget and tips for maintaining a budget. In a paragraph explain at least 3 reasons and 2 tips. Be sure give details about these to support your answer.

Three reasons to have a budget include having a plan of what to do with your income, to prevent impulsive decisions, and to have a backup plan in case of a financial emergency. One tip would be to be a good consumer. This will help you spend on your needs and not your wants. Another tip is to evaluate and keep track of your income and expenses. This will help you to stay on track in case something went wrong.

The first step to setting up a budget is

Track income and expenses

A unique code used by the automobile industry to identify and track each vehicle manufactured is

VIN

First explain in your own words what personal values means. Give some examples. Next, tell why is it important to prioritize your values when making decisions?

Values are things that are important to me. They are things that I believe in or care about. Some of my values are honesty, optimism, and perseverance. When making a decision, it is important to prioritize values because it helps you keep things that are important in mind. You want to make sure your decisions reflect your values in the end.

Expenses that change from one time period to the next are called

Variable expenses

A service charge on your bank statement will result in

a lower balance

A common advantage of using credit is:

ability to obtain needed items now

Money deposited with a financial institution for investment and/or safekeeping purpose

account

How can I accomplish this goal? How realistic is the goal, based on constraints, such as financial factors? These are all questions to ask yourself to make sure your SMART goal is

achievable

An outstanding amount of money is called

balance

A credit card issued through a credit union would be an example of a _____ card.

bank

An establishment for lending, issuing, borrowing, exchanging, and safeguarding money is called

bank

__ is the cost of a vehicle with standard equipment, no options or upgrades included.

base price

What is an IOU certifying that you loaned money to a government or corporation and outlining the terms of repayment called?

bond

The estimated market or trade-in worth of a used vehicle as published in a guide by businesses such as Kelley Blue Book, Edmunds or NADA is called

book value

A plan for managing income, spending and saving during a given period of time is called _

budget

A "used" check that has been paid and subtracted from the check-writer's account is called

canceled check

Jamy has been working at Friendly Pets Vet Center for over two years now and receives a steady income of $1,200 per month. She also paid off her student loan debt three months ago. When a lender looks at this information, Jamy will have a high rating in which of the 5 C's of Credit.

capacity

The ability to have and use credit is a privilege earned by exhibiting behaviors related to characteristics that creditors consider when making leading decisions. When they are asking questions like: How long have you lived in your current address and what is on your credit report they are looking at which of the five C's of Credit?

character

Which of the following is a plastic card that gives access to a line of credit? The line of credit is theoretically limitless, but users are expected to repay their balance in full every month.

charge card

Something valuable that the lender can take as repayment if you default on your loan and can't pay it back is called __

collateral

Which type of auto insurance helps to pay for damage to your car as the result of an accident?

collision

Which key element of a contract states individuals involved in a contract must be able to fully understand the conditions of the contract?

competent parties

Which type of interest is computed on the sum of the original principal and accrued (earned) interest?

compound interest

Which key element of a contract states one party gives up something and the other party provides something?

consideration

is an exchange, promise or agreement between two parties that is enforceable by law.

contact

This person is responsible for a loan if the borrower does not pay it back.

cosigner

is the granting of money or something else of value in exchange for a promise of future repayment.

credit

is the agency that checks credit information and keeps a complete file on people who apple for and use credit.

credit bureau

Which of the following is a plastic card that used to make purchases now and pay for them later? Users are limited in how much they can charge, but they are not required to repay the full amount each month. Instead the balance accrues interest like a loan. No interest is owed if the balance is paid in full each month.

credit card

Rating your use of credit based on payment history, amount owed, length of credit history, new credit and types of credit is called

credit score

The _____ is the person or financial institution or business that lends money to the person borrowing.

creditor

A bookkeeping term for a sum of money owed by an individual for institution; charge deducted from an account is called

debit

are any amount of money subtracted from your gross pay.

deductions

ed slip showing the exact amount of paper money, coin, and checks being deposited to a particular account

deposit slip

used to add funds to a bank account.

deposit slip

To write the payee's won signature on the back of a check before cashing, depositing, or giving it to someone else is called

endorse

To build a credit history, a person could:

establish a steady employment record

The last step of the decision making process is

evaluate your decision

Cost incurred for goods and services is

expenses

A service contract that provides for no cost or low cost vehicle repair, after the factory or dealer warranty expires.

extended warranty

A finance fee and interest are the same thing.

false

A mutual fund is an investment issued by a state or local government agency.

false

About 25% of payday loan borrowers default on their payday loan in 2 years.

false

An advantage of rent-to-own is if a payment is missed the consumer must return the item but will receive all the money for payments made in full.

false

An example of a periodic expense is entertainment.

false

Check cashing services charge minimal fees for cashing checks.

false

Compound interest refers to money earned from buying a tax-exempt investment.

false

Gross pay results from subtracting various types of deductions from your earnings.

false

Having a part-time job in high school has no influence on how much money you will make in the future.

false

If a rent-to-own contract is given to a minor it will apply as long as the rent-to-own sales associate is an adult.

false

If you are denied credit, the creditor is not legally obligated to explain why.

false

If you stop using your credit card for purchases, you won't ever have to pay interest again.

false

If your car is repossessed it is your legal responsibility to pay the remaining balance of the debt to the creditor, however, if this person/company sold the car then you only have to pay the difference.

false

If your credit card is stole from you, the credit card company will let you know when it has be found.

false

In the 50/30/20 Budget Rule people should plan to use 30% of their income toward saving and paying off debts.

false

Invoice price and base price are identical.

false

Is is the responsibility of store to read go over the contract and make sure the renter understands all parts of the contract.

false

It is legal for a creditor to deny an applicant credit based on martial status or age.

false

It isn't legal for companies to require employees to use direct deposit.

false

Once you are issued a credit card, your interest rate is locked in, meaning it will never go up or down.

false

One of the first steps in the vehicle buying process is to discuss the amount of your monthly payments with the salesperson.

false

Only employees pay the FICA tax from their income.

false

Payday loans are popular because you only have to wait two business days before you can get the money you are borrowing.

false

Payday loans are usually on a two month term so that borrowers have extra time to catch up on monthly bills.

false

Rent-to-own is a much better deal than getting a loan with monthly installments for the consumer because it will cost less money overall.

false

The Federal 3-Day Cooling Off Rule applies to new, not used vehicles.

false

The amount of interest an account pays has little effect on how fast your money will double.

false

The annual fee for a credit card is set by the government.

false

The decision-making process starts with gathering information.

false

The implied warranty can sometimes be transferred to the new buyer but may come with an additional fee.

false

The safe debt load means never borrow more than 10% of your yearly income and never spend more than 20% of your monthly income.

false

The total cost of a rent-to-own contract is computed by dividing the monthly payment by the number of payments.

false

There are no fees associated with a savings account.

false

Use HALT when writing your goals to make sure they are attainable.

false

When a trade-in is part of a vehicle purchase, the dealer will offer the best price for the trade-in because they want to make a sale.

false

YTD on your pay stub means Yearly Tax Deductions.

false

Which type of bond is the safest?

federal government

A common deduction on a person's pay stub would be ___

federal income tax

are extra charges for using a credit card and may include service charges and late charges

fees

The interest paid over the life of the loan and all fees that are paid up front combined together are called

finance charge

The grace period refers to the time:

for paying an account without an interest charge

The payment people receive for providing resources in the marketplace is called

income

When you make a monthly payment on your car loan, it is considered which type of credit?

installment

is the amount of money a person or business must pay for an insurance policy.

insurance premium

What is the price of using someone else's money called?

interest

When you borrow someone else's money this usually comes at a price this price is called

interest

The amount of interest on loan is called

interest rate

Approximate price the dealer pays the manufacturer for the vehicle is called

invoice price

Which retirement plan allows self-employed people to set aside up to 25% of income (but not more than $56,000 per year)?

keogh plan

A legal contract that outlines the terms under which one party agrees to rent property from another party is

lease

state laws which protect the buyers when vehicles have serious defects.

lemon laws

_ is the sum of money provided temporarily on the condition that the amount borrowed be repaid, usually with interest.

loan

Comparing the APR among several credit cards allows you to obtain the

lowest interest rate

Which investment usually requires minimum balance of $5,000 and only a limited number of checks can be written each month?

money market account

Which key element of a contract states that both parties in contract agree to the essential details, rights and obligations of the contract?

mutual agreement

Which investment is professionally managed portfolios made up of stocks, bonds and other investments?

mutual funds

Something we have to have in order to survive is considered a

need

Which type of interest means that no interest is paid on principal?

non interest bearing

a deficit in a bank account caused by drawing more money than is currently in the account.

overdraft

Which of the following employee benefits would a working parent find most useful?

parental leave

is the time period in which employees earn wages.

pay period

This is attached to your paycheck and will explain how much money you earned, when you earned it, and how much went to taxes or other deductions.

pay stub

is a short-term loan due on your next paycheck.

payday loan

The original amount of money deposited or invested, excluding interest is called

principal

Which type of investment offers excellent protection against inflation?

real estate

A(n) _____ is when a safety defect is discovered, the manufacturer is required to remedy the problem at no charge to the owner.

recall

Legally recording ownership of a vehicle with a government agency for tax and licensing purposes is called

registration

Does this seem worthwhile? Am I the right person to reach the goal? Does this match our efforts and needs? These are all questions to ask yourself to make sure your SMART goal is

relevant

is basic lease contract with the option to purchase the good(s) leased.

rent to own contract

A method to estimate the number of years it will take for a financial investment (or debt) to double in value at a given annual interest rate is called

rule of 72

A bank account that accrues interest in exchange for use of money on deposit is called

savings account

The lowest interest rate is usually earned on a :

savings account

A _____ is someone who can put money away consistently and live within their means, without touching that savings.

savvy saver

a monthly fee a bank charges for handling a checking account.

service charge

Which type of interest is only calculated on the principal not earned interest?

simple interest

Utility companies and medical service organizations commonly offer _____ credit.

single payment

A decision is only as strong as the weakest link. According to the video we watched, there were 6 links. Which link helps us to answer the statement "I am choosing this alternative because

sound reasoning

a request made to a bank to not pay a specific check.

stop payment

The amount of time you have to pay back money you borrowed is called

term

The length of the loan is called

term

A document that shows legal ownership of a vehicle is called

title

A certificate of deposit must be held for a set amount of time such as six months or a year.

true

A disadvantage of using credit is impulse buying.

true

A salary is generally an annual amount agreed upon between the employer and and the employee which is paid out monthly or bimonthly.

true

A share of stock represents ownership in a company.

true

APR is the percentage cost of credit on an annual basis.

true

About 75% of customers return rental item from a rent-to-own store within first 4 months.

true

Almost 80% of all payday loans are used to repay another payday loan.

true

An automatic payment is an arrangement with a creditor that allows the creditor to periodically withdraw money from a credit card, checking or savings account to pay a bill.

true

Focusing only on the monthly payment could result in paying too much for a vehicle.

true

If you are refused credit because of a credit report, upon request from you, the lender must give you the name and address of the credit bureau that issued the report.

true

In a rent-to-own contract there is no down payment or credit check required

true

One advantage of a payday is that there is no purchasing restrictions meaning you can spend the money you borrow on whatever you want.

true

One consideration given by the renter is that merchandise may be repossessed by the store if the renter fails to make a payment.

true

One reason to have a budget is to help you learn how to live on less money.

true

Penalty charges will apply if money from a retirement plan is withdrawn before retirement age, except under certain circumstances

true

People must pay a percentage of their income in taxes, therefore, people who earn more, pay a higher percentage of their income in taxes.

true

Rent is considered a fixed expense.

true

Rent-to-own contract is not written as a loan, therefore, annual percentage rates are not disclosed.

true

Savings account are considered a safe place to keep your money because the principle is guaranteed.

true

The largest cost factor when owning a new vehicle is depreciation.

true

Travel costs to work are considered to be "hidden" job costs.

true

Values are things that are important to us and the things we care about.

true

When buying a vehicle, begin your negotiations with the invoice price.

true

Writing SMART goals helps to make sure your goal is attainable.

true

You may use an ATM or debit card with both savings and checking accounts.

true

What is your total pay based on how many hours you work?

wages

Things we would like to have but are not necessary for survival are called

wants

An amount of money taken out of an account is called

withdrawal

Obtaining cash from an ATM is similar to

writing a check