QL Semester Test
Duc has a credit card with a $1000 credit limit. His outstanding balance is currently $800. What is the maximum amount he can now spend on this credit card? $200 $800 $1000 $1800
$200
The defining characteristic of a job in the gig economy is... Workers are paid by the federal government Workers decide how much they want to pay in taxes Workers receive free phones and wifi connections Workers complete short-term work for many different clients
Workers complete short-term work for many different clients
Which repayment option does not accrue interest while your required payments are paused? Consolidation Deferment Refinancing Forbearance
Deferment
You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal? 6 months 1 year 2 years 3 years
2 years
The average APR for a payday loan is closest to ... 4% 14% 40% 400%
400%
Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay? 50% on wants, 20% on saving, and 30% on needs 50% on saving, 20% on needs, and 30% on wants 50% needs, 20% on saving, and 30% on wants 50% on saving, 20% on wants, and 30% on needs
50% needs, 20% on saving, and 30% on wants
Which of the following statements is true about this Schumer Box? Depending on your creditworthiness, the APR for a borrower will always either be 8.99%, 10.99% or 12.99% There is an introductory APR that is valid only for 1 year, but then the permanent APR is lower than that at 8.99%. You will never be charged an APR higher than 14.99% A 28.99% APR may be applied to your account for late payment
A 28.99% APR may be applied to your account for late payment
You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT... Proof of employment A bank account First and last month's rent A security deposit
A bank account
Which of the following individuals or groups would be the LEAST likely to look at your credit score? Someone interviewing you for a job Credit card companies An insurance company reviewing your applicant for auto insurance A bank representative who is helping you open a savings account
A bank representative who is helping you open a savings account
Which of the following statements is TRUE about the value of a college degree? A high school graduate can expect to earn about the same as a college graduate Every college graduate can expect to have a starting salary over $60,000 right after college A college graduate can expect to earn, on average, more than a high school graduate over a career A college graduate typically earns less than someone with a high school diploma for the first 10 years
A college graduate can expect to earn, on average, more than a high school graduate over a career
Trudy tells her mom that she wants to buy a house within two years of graduating from college. Her mom says Trudy will need a down payment first. What is a down payment? A large sum of money you pay when taking out a mortgage so that the principal of your loan is smaller A specific type of tax advantaged bank account used for saving money to buy a house The first year's worth of property taxes, held in reserve A prepayment to a real estate agent so that they will start helping you house hunt
A large sum of money you pay when taking out a mortgage so that the principal of your loan is smaller
Which of the following is TRUE about a lease agreement? A lease is an agreement between you and your roommates that you submit to the apartment owner. You never have to pay any fees when you sign a lease. If you do, that means it is a scam. A lease often has information about your prior housing experience; it's a record that the apartment owner can use to see if you are a good candidate A lease is an agreement that includes details about rent, apartment policies, vacating, etc.
A lease is an agreement that includes details about rent, apartment policies, vacating, etc.
You will find each of the following pieces of information on your FAFSA Submission Summary EXCEPT... A record of the answers you submitted on your FAFSA Your Student Aid Index (SAI) Your eligibility for federal student aid A record of all scholarships you have applied for
A record of all scholarships you have applied for
Which of the following is true about fixed and adjustable-rate mortgages? Fixed-rate mortgages have a constant payment every month, but an interest rate that increases throughout the term of the loan Fixed-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions Adjustable-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions The two mortgages work the same way but are called different names depending if they come from a bank or a credit union
Adjustable-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions
Shira is trying to decide between getting a debit card, a prepaid debit card, and a credit card. Which statement is true? All 3 cards are completely different Debit cards and prepaid debit cards are the same Debit cards and credit cards are the same All 3 cards are completely the same
All 3 cards are completely different
Amy and Chuck each buy a house in the same neighborhood for $250,000. Amy's monthly mortgage payment is $400 more per month than Chuck's. Which one of the following statements could explain this difference? Amy chose a shorter term for her mortgage, so her monthly payments are higher Amy made a larger down payment, so her monthly payments are also larger Chuck chose a shorter term for his mortgage, so his monthly payments are also lower Chuck has a lower credit score, so his interest payments are also lower
Amy chose a shorter term for her mortgage, so her monthly payments are higher
Which of the following is most likely to represent a fixed rate, secured debt? A student loan A credit card A prepaid debit card An auto loan
An auto loan
Which of the following things should you have ready when contacting a credit reporting agency to report an error on your credit report? Your preferred payment method to pay for fixing the error A list of all of your financial accounts and balances An explanation of the mistake and any evidence you have supporting your claim References from a non-family member vouching for your creditworthiness
An explanation of the mistake and any evidence you have supporting your claim
Which free credit report service is authorized by federal law but only accessible once per year? AnnualCreditReport.com Credit Karma Credit Wise Wallet Hub
AnnualCreditReport.com
Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT... Reducing spending by canceling some of her streaming subscriptions Taking extra shifts at work to increase her income Making more than the minimum required payment on her debt Applying for another credit card to use in case she runs out of cash paying off her debt
Applying for another credit card to use in case she runs out of cash paying off her debt
Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time? Paying your bills on-time Paying down balances on your credit card accounts Decreasing your utilization of credit Applying for multiple credit cards
Applying for multiple credit cards
Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal? Always say "credit" when asked "credit or debit?" at a store Ask his parents to cosign a credit card or add him as an authorized user on their credit card Any time he borrows money from a friend or family member, be sure to pay it back promptly Take out some private student loans, even though he doesn't need them because he has grants and scholarships Clear selection
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now? Average rent for an apartment Food and grocery store options in the area Employment opportunities Average cost of Uber, Lyft, or taxi fare
Average cost of Uber, Lyft, or taxi fare
As you make decisions during college, you should focus on... Minimizing your student loan debt at all costs Having fun, because you're only in college once Focusing entirely on your studies to maximize your GPA Balancing your academic, social, and financial decisions to make the most out of the entire experience while setting yourself up for success post-college
Balancing your academic, social, and financial decisions to make the most out of the entire experience while setting yourself up for success post-college
Danaisha does all her grocery shopping at organic markets and has a monthly grocery bill of $325. Charles says that Danaisha is wasting her money on wants instead of focusing on needs. He buys in bulk, uses coupons, and shops at Save-More for a monthly bill of $195. Who's budgeting correctly for food? Danaisha, because she is focusing on her health, which will have a guaranteed payoff in the long run Charles, because he's taking efforts to save money by focusing on his needs only Both, because needs vs wants are determined on an individual basis Neither, because they should meet in the middle somewhere. Charles should focus more on health, and Danaisha should cut her spending.
Both, because needs vs wants are determined on an individual basis
Bryan is a great cook. He works as an independent contractor and books gigs cooking customers breakfast or dinner in their own homes on the app Cook For You. Who provides Bryan's health insurance and retirement plan? Each family he cooks for The owners of the Cook For You app The Google and Apple app stores Bryan has to fund them himself
Bryan has to fund them himself
For two months in a row, Aaron realizes he has a budget deficit of roughly $175. Which of these options makes the most sense for him to fix his problem? Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing Contribute $100 less to savings each month and $75 less to his retirement fund Sell his current car and get a less expensive vehicle
Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends
Which of these boxes of cereal has the LOWEST unit price? Cereal A, which costs $3.20 for a 16 oz. box Cereal B, which costs $5.00 for a 32 oz. box Cereal C, which costs $2.50 for a 10 oz. box Cereal D, which costs $4.50 for an 8 oz. box
Cereal B, which costs $5.00 for a 32 oz. box
When loans are amortized, monthly payments are _______ , while the amount of your monthly payment applied to interest ________ and the amount of your monthly payment applied to the principal _______ over time. Constant, Increases, Increases Constant, Decreases, Increases Variable, Decreases, Increases Variable, Decreases, Decreases
Constant, Decreases, Increases
You find an error on your credit report: Your credit card account indicates that you are 60 days late on your payment but you have bank records indicating that you have always made on-time payments. What should you do FIRST? Contact the credit card company to have them fix it Contact the credit reporting agency Wait a few weeks to see if it gets resolved Call the police to report the possible identity theft
Contact the credit card company to have them fix it
If you are trying to substantially reduce the amount you spend on food, you should try... Cooking your own food at home for as many meals as possible Dining at restaurants more often so you don't waste water doing dishes Eating more snacks on the go and way fewer meals at home Drinking more coffee and soda so you are not as hungry for food
Cooking your own food at home for as many meals as possible
Who tracks all of your credit information? Credit reporting agencies (Equifax, Experian and TransUnion) Federal government Consumer Financial Protection Board (CFPB) Lenders
Credit reporting agencies (Equifax, Experian and TransUnion)
You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a NEGATIVE impact on your credit score? Joanie says, "Call the auto lender and see if you can negotiate a lower monthly payment or some other deal." Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan." Angie says, "Pick up a second job for as long as it takes to accumulate enough money to make all your payments, even if it means losing time with friends and family." Betty says, "Cut down to a bare bones budget, where your necessities and your debt repayments take first priority. Cut everything non-essential."
Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."
Which one of these expenses most likely represents a VARIABLE cost in someone's budget? Electricity bill Rent Car insurance premium Student loan payment
Electricity bill
Each of the following organizations offers grants to college students EXCEPT... The federal government Colleges Private companies FAFSA
FAFSA
In order to qualify for financial aid, which application must you submit? FAFSA PLUS SAVE SAI
FAFSA
All of the following are good budgeting strategies if you want to save money at the grocery store EXCEPT... Focusing on unit price when comparing similar products Building a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat Focusing only on the price when comparing similar products Preparing a grocery list before you go to the store and avoiding buying items that aren't on the list
Focusing only on the price when comparing similar products
During a period of financial hardship, you can apply for this to pause student loan payments while interest still accrues... Grace period Grants and scholarships FAFSA Forbearance
Forbearance
What types of money are used in paying for college and in what order should you use them? Your money, borrowed money, free money Borrowed money, your money, free money Your money, free money, borrowed money Free money, your money, borrowed money
Free money, your money, borrowed money
Which of the following methods of getting your credit score would involve paying a fee? Checking your credit card or loan statement Talking to a non-profit counselor Checking creditkarma.com Getting a score from myFICO.com
Getting a score from myFICO.com
Which of the following ways to pay for college is MOST likely to be based on someone's financial need? Direct PLUS Loans Grants Scholarships Federal Subsidized Loans
Grants
Which of these options lists the types of financial aid from MOST attractive to LEAST attractive? Private loans, Federal loans, Work-study, Grants/Scholarships Grants/Scholarships, Work-study, Federal loans, Private loans Work-study, Grants/Scholarships, Federal loans, Private loans Federal loans, Grants/Scholarships, Work-study, Private loans
Grants/Scholarships, Work-study, Federal loans, Private loans
You overhear your cousin talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT... A budget can help you identify any bad spending habits Using a budget can allow you to work towards your financial goals Having a budget can help you create an emergency fund Having a budget is a requirement for obtaining a mortgage
Having a budget is a requirement for obtaining a mortgage
What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time? Snowball method Make minimum payments High rate method Consolidate multiple debts into one new loan
High rate method
Isaiah has a summer internship at a technology company and is paid $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct? His gross pay is $2,500 and net pay is $3,000 His gross and net pay are $3,000 His gross and net pay are $2,500 His gross pay is $3,000 and net pay is $2,500
His gross pay is $3,000 and net pay is $2,500
Which of the following statements is CORRECT about secured loans? They are a good choice to use for student loans If the borrower does not make payments, the lender can repossess the item In the event of default, the borrower loses nothing except for the down payment They usually have higher interest rates as compared with unsecured loans
If the borrower does not make payments, the lender can repossess the item
How much does it cost to file the FAFSA? It is free It is free the first time you file, but costs $9.99/year thereafter It is 2% of your total loan amount $50
It is free
Which of the following statements about credit scores does this bar graph support? Credit scores tend to drop as you grow older because you are more likely to miss a payment at some point It is more difficult for young people to borrow because they have less payment history for a lender to rely upon When young people borrow, they are likely to have lower interest rates because their credit scores are lower It is easier for young people to get loans at lower interest rates because they are likely to have never been late with a payment
It is more difficult for young people to borrow because they have less payment history for a lender to rely upon
Although it's not a type of financial aid, how can transferring credits from a community college help save you money on college costs? It reduces amount of credits you'll have to pay for at your 4-year college Colleges will pay you for any credits transferred from a community college The cost of community college credits can be deducted on your taxes Transferring credits from a community college makes you eligible for lower interest rates when taking out federal student loans
It reduces amount of credits you'll have to pay for at your 4-year college
Janelle's family earns about $60,000 per year. She has been accepted to College A and College B and is comparing their financial aid packages. College A has a sticker price of $28,000 and net price of $12,000. College B has a sticker price of $60,000 and net price of $9,000. Which statement below is FALSE? It will cost less to attend College A College B is providing Janelle more grants and scholarships College A has a lower sticker price than College B It will cost less to attend College B
It will cost less to attend College A
Frank and Jasmere are each shopping for a new car for themselves. Each will need a $20,000 loan that they will pay back over a five year period. Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE? Over the five year period, Jasmere and Frank will pay the same amount for the car loan Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment Jasmere's monthly payment on the loan will be about $100 more than Frank's payment Lenders are not allowed to charge people different interest rates based on their credit scores
Jasmere's monthly payment on the loan will be about $100 more than Frank's payment
Keith's tuition, room & board, and fees for freshman year total $26,000. Including scholarships, grants, and federal student loans, his financial aid package is $25,500. Which option below is both realistic and the most financially responsible? Keith's financial aid package covers all of his necessary costs, so there is no need for him to do anything else Keith should take out a private loan and limit himself to $8000 in other expenses freshman year Keith should pick up a part-time job to cover his remaining costs and personal expenses Keith should not attend this college because he cannot afford it
Keith should pick up a part-time job to cover his remaining costs and personal expenses
Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses? Dining out at local restaurants Loan payment on a new car Expenses for new clothes Postponing a purchase for a big-screen TV
Loan payment on a new car
Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score? Cancel his credit cards Make on-time payments Get a car loan Check his credit score
Make on-time payments
Which best describes the Debt Snowball method for paying off debt? Only make payments on your smallest debt first, then move on to your second smallest debt, and so on Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the highest balance Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
Select the statement below that accurately describes a characteristic of a credit card. You owe the same payment every month You must have money deposited into a checking account to use the credit card for purchases Making full payments on-time every month is the only way to avoid interest charges They do not charge interest
Making full payments on-time every month is the only way to avoid interest charges
Which of these credit payback strategies would lead to the HIGHEST overall cost? Paying off your credit card bill in full every month Paying 20% of your credit card balance every month on time Making the minimum payment (3% of your credit card balance) every month on time Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
Your school counselor is a great resource for all of the following EXCEPT... Providing information about scholarships and grants you wouldn't be able to find elsewhere Negotiating lower interest rates with your lenders Suggesting specific scholarship and grant opportunities based on your personal strengths and accomplishments Comparing different colleges, their costs of attendance, and financial aid offers
Negotiating lower interest rates with your lenders
Janine is considering what auto costs she is going to have after buying a new car. She has budgeted enough money for the monthly auto loan payment, gas, and auto insurance. Has Janine factored in all of the costs associated with car ownership? Yes, these are the three costs she should expect to pay once she is a car owner No, she does not need to include the cost of auto insurance as it is included in her auto loan payment. No, she needs to factor in other costs such as maintenance, emergency repairs, etc. No, she does not need to include the cost of gas as it is covered under her auto insurance policy
No, she needs to factor in other costs such as maintenance, emergency repairs, etc.
Typically, when should you first file the FAFSA? After you finish freshman year of high school October or November of your last year of high school After you receive your Student Aid Index Once you are ready to start repaying your student loans
October or November of your last year of high school
Denise took out a payday loan for $300 in August. By February of the next year, she was able to pay back the loan, but she had spent a total of $750 doing so. What's the most likely story of how this happened? The minimum monthly payment for payday loans is usually only $10 or $15, so a lot of interested accumulated Upfront, Denise knew there would be $450 of fees attached to the loan, but she took out the loan anyway Payday loans must be paid in full within two weeks, and if not, the only option is to renew the loan for a high penalty fee, which she did approximately 12 times Denise not only paid the $300 she owed, but she prepaid an extra $450 in case she needs another loan in upcoming months
Payday loans must be paid in full within two weeks, and if not, the only option is to renew the loan for a high penalty fee, which she did approximately 12 times
Why are payday loans so much easier to qualify for than traditional bank loans? Payday loans are only used by affluent households, and the banks know they have enough money to cover them Payday loans are just another word for direct deposit, and almost all employers offer their employees direct deposit instead of a paper paycheck Payday loans require proof of employment or other regular income but not a credit check Payday loans are typically for such small dollar amounts that no one cares if you repay them or not
Payday loans require proof of employment or other regular income but not a credit check
What are the two most important factors in calculating your credit score? Payment history and types of accounts Amounts owed and length of credit history Payment history and total debt Length of credit history and new credit inquiries
Payment history and total debt
Taylor is about to go car shopping, and she has $5000 saved that she can use for a down payment while still having extra cash in her emergency fund. She expects the exact model car she's looking for to cost $35,000. If her top priority is having the lowest monthly payments possible, which advice should she follow? Put in $0 for your down payment, and choose a loan with a short term length Put in $2500 for your down payment, and choose a loan with a short term length Put in $3500 for your down payment, and choose a loan with a long term length Put in $5000 for your down payment, and choose a loan with a long term length
Put in $5000 for your down payment, and choose a loan with a long term length
One way the grocery store tricks you into spending more money than you budgeted for is... Being open early in the morning and late at night Paying their cashiers and baggers more Putting high priced items at eye level and lower cost items above or below eye level Accepting digital and print coupons
Putting high priced items at eye level and lower cost items above or below eye level
An excellent credit score will help with which aspect of car financing? Bargaining for a great sales price Receiving a large down payment Qualifying for a low interest rate Having a wide selection of term lengths
Qualifying for a low interest rate
You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Which of your expenses would likely decrease by having roommates? Groceries and eating out Rent Cell phone bill Bedroom furniture
Rent
Sadie is a freelance social media specialist. Companies can hire her to improve their social media presence. Why is it particularly important that Sadie, and other freelancers like her, have an emergency fund? Freelancers charge a very low hourly rate, so Sadie probably doesn't get paid much Sadie doesn't have guaranteed work every day, so she needs money in case she goes a while between clients Sadie will need a large emergency fund in order to make her monthly insurance payments Sadie's job requires a lot of expensive specialty equipment that will always need replacing
Sadie doesn't have guaranteed work every day, so she needs money in case she goes a while between clients
All of the following would show up on a credit report EXCEPT... Salary of your current job Payment history of your car loan Credit card payment history Student loan activity
Salary of your current job
Which of the following is a good strategy to use when it comes to paying for college? Only report your own earnings and savings, not those of your parents, even if you live with them full-time See how much you can borrow in loans before applying for scholarships Spend the money that you earn from your summer job so you can get more financial aid Save your earnings from your summer job so that you can reduce the amount of loans you need to take
Save your earnings from your summer job so that you can reduce the amount of loans you need to take
What action corresponds to the advice "Pay yourself first?" Wait until the end of the month to determine how much you have leftover to save Set aside a fraction of your paycheck into a savings account before you start spending Spend your regular paycheck on needs and wants but funnel any extra money into saving Become self-employed so you're paying yourself instead of being paid by an employer
Set aside a fraction of your paycheck into a savings account before you start spending
What is the general timeline to establish your first credit score? As soon as you apply for a credit card or loan Six months after you first actively use your credit Once you pay all of your credit balances in full Once you turn 18
Six months after you first actively use your credit
Which of the following is the default federal student loan repayment plan college graduates are entered into, requires the same minimum payment for the life of the loan, and ensures the borrower will pay the loan in full in ten years? Standard repayment plan Graduated repayment plan Extended repayment plan Income-driven repayment plan
Standard repayment plan
Which of the formulas below correctly calculates net price? Sticker price - student loans = net price Grants and scholarships + student loans = net price Sticker price - grants and scholarships = net price Sticker price + grants and scholarships = net price
Sticker price - grants and scholarships = net price
If you are having trouble making auto loan payments and are really following a tight budget, which recommendation below represents the WORST advice? Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms Explore whether a free or non-profit credit counseling service could help
Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control
The federal government makes interest payments on __________ while you're enrolled in school at least half-time, for the first six months after you leave school, and during any period of deferment. Work-Study Subsidized federal loans Unsubsidized federal loans Grants
Subsidized federal loans
As a young adult, all of the following are good strategies for building credit, EXCEPT... Open a credit card, with your parent or guardian as a cosigner Take out a payday loan Become an authorized user on a credit card used by your parent or guardian Open and use a secured credit card
Take out a payday loan
Credit card disclosure: "Your due date is at least 25 days after the end of the billing cycle. We will not charge you interest on new purchases provided that you have paid your previous balance in full by the due date each month." Identify the true statement. If you make the minimum payment on your card within the 25 day period, the credit card company will not charge you interest If you pay your previous balance in full after the due date, the credit card company will not charge you interest 25 days is an exceptionally long period without paying a credit card bill The 25 days after the end of the billing cycle is referred to as the grace period
The 25 days after the end of the billing cycle is referred to as the grace period
Which of the following is TRUE about the Student Aid Index (SAI)? The LOWER your SAI the MORE financial aid you are eligible for The HIGHER your SAI the MORE financial aid you are eligible for The LOWER your SAI the LESS financial aid you are eligible for Your SAI does not impact how much financial aid you are eligible for
The LOWER your SAI the MORE financial aid you are eligible for
The amount you can charge to a secured credit card is limited by... Your credit score The amount of money you deposit into an account as collateral The total amount of money across all your bank accounts How long you've had an account with the bank
The amount of money you deposit into an account as collateral
Which of these statements best explains why it's often a good idea to pay more than the monthly amount due on an amortized loan? Every time you pay extra, the lender will reduce the interest rate they're charging by a small amount The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly The extra payment will be applied to the interest you owe, which will reduce the overall cost of your loan Amortized loans typically have much higher interest rates than credit cards, so they're the best place to put your extra cash
The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly
Who receives and uses the information submitted in your FAFSA? Your employer to see if you'll still be able to work while attending college Your parents to keep track of your progress at college The federal government for tax purposes The schools you've applied to and your state government to determine your eligibility for financial aid
The schools you've applied to and your state government to determine your eligibility for financial aid
Which of the following is a benefit of an income-driven repayment plan? Theoretically, your payment should never be more than you can afford You will pay the least amount of interest over the life of the loan when compared to other loans They're structured to be paid off in 5-10 years Even if you start to make more money, your monthly payments won't change
Theoretically, your payment should never be more than you can afford
Review this partial credit report, and then choose the response below that accurately depicts the information on the report. The borrower paid a $30 fee in February 2015 This borrower was never late with any of their credit payments This borrower's most recent payment was $30 This borrower was 30 days late on their May 2015 payment
This borrower was 30 days late on their May 2015 payment
Why would credit card companies prefer that their cardholders make the minimum monthly payment every month rather than paying their total balance in full? This is required by federal law for tax purposes This allows the card holder to pay their bill quickly and close the card when they're ready This enables the credit card company to make more money This helps cardholders develop financial independence
This enables the credit card company to make more money
What is an advantage of using a credit card? It will not affect your credit score or credit history Since it is tied directly to your checking account, it prevents you from spending money you do not have If you need to carry a balance, the interest rates are generally quite low (less than 5%) You can make an emergency purchase that you otherwise don't have the money to pay for right now
You can make an emergency purchase that you otherwise don't have the money to pay for right now
Which of the following is considered a direct cost of attendance? Travel expenses Cell phone bill Tuition Food and entertainment
Tuition
Who is eligible to receive Direct Subsidized loans? Graduate students Professional students Undergraduate students Students enrolled less than half-time
Undergraduate students
You have a credit card that you use regularly for small purchases with the goal of improving your credit score. Which strategy would have the GREATEST positive impact? Use less than 30% of the credit limit and pay it off in full every month by the due date Always carry a balance from month to month Regardless of how much your balance is, make the minimum payment required on your credit card every month by the due date Put the credit card in a drawer instead and don't ever use it
Use less than 30% of the credit limit and pay it off in full every month by the due date
Greg is trying to decide whether he needs a car when he moves to the city. Which of the following would be a reason for Greg to get a car rather than use public transportation? There are several public transportation routes between Greg's apartment and work The cost of public transportation is less than Greg's monthly car payment Greg's company covers half the cost of his monthly public transportation pass Using public transportation, Greg's commute to work one-way is two hours
Using public transportation, Greg's commute to work one-way is two hours
Which of these represents a potential consequence of neglecting to pay your federal student loans? Wages or tax refunds can be garnished Passport revocation Driver's license suspension Termination from your job
Wages or tax refunds can be garnished
Now that Sanjana is done with college, she is trying to decide whether or not she should buy a new laptop for herself. She has made a preliminary list of questions she can ask herself to determine if the new laptop is a need or a want. Which of the following questions would you ELIMINATE from this list? Can I afford this laptop right now? Is this the right time to buy this laptop or will it likely be on sale later? What model laptop is trendy right now with people my age? How am I going to pay for this laptop? If I have to charge it or take out a loan, can I afford the monthly payments?
What model laptop is trendy right now with people my age?
Which of the following statements comparing credit and debit cards is TRUE? Far more businesses accept credit cards than debit cards Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard Credit card companies provide you with a monthly statement, while debit cards do not With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later
With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later
What benefits do you receive by taking out a loan with a cosigner? You don't get penalized for late payments You get a discount on future loans after this one is paid off You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit You automatically get the same credit score as the cosigner once the loan is paid off
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
You are putting together your first post-graduation budget. Your net pay is $2,500 per month and you estimate that your monthly expenses will be $2,625. How would you describe your budget? You have a surplus of $125 You have a deficit of $125 You have a deficit of $2,625 You have a surplus of $2,500
You have a deficit of $125
Which description is most accurate for a Zero-Based Budget? You put every dollar of your net pay into a budget category each month You spend your checking account balance down to $0 every month You spend your saving account balance down to $0 every month You pay every one of your debts down to $0 every month
You put every dollar of your net pay into a budget category each month
Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ? Accessing credit only becomes more expensive as you get older Negative marks on your credit report go away faster for younger borrowers Credit scores are free for anyone under the age of 25 You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
Reading through a credit card's Schumer Box, you see the APR for a specific card is set at 9.99% - 23.99%. Which statement is true? When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed Your APR will be within that range, depending on the strength of your credit history In this case, you want the highest APR in the range because you'll earn more The APR on credit cards is usually fixed, so it won't be adjusted as long as you are a cardholder
Your APR will be within that range, depending on the strength of your credit history
How can your credit score impact your financial well-being? Only consumers with high scores are approved for credit Consumers with low scores get lower interest rates on loans than those with high scores Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be It generally has no impact on your financial situation
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
A loan with a shorter term length will have __________ monthly payments, and you will pay __________ in total interest. higher, less higher, more lower, less lower, more
higher, less
