Personal Finance Quiz 4

With a beginning balance of $7,500, payments of $1,780.47 annual and an interest rate of 6%, on a five year loan, total interest paid over the amortized loan will be:

$1,402.37

Risks to insure against, include, but are not limited to:

All of the answers shown are risks to insure against

The following applies to whole life policies I. Continues after needs are gone II. more costly than term life insurance III. no guarantee of renewability IV, pure life insurance coverage

I and II

Choose a fixed rate mortgage over a variable rate mortgage if

I. You expect to be 5 years or longer in the house II. Rates are expected to go higher

Advantages to a home equity line of credit include(s): I. House values can fluctuate II. Interest is tax deductible III. Loans secured by real estate can be lower interest IV. Underwater mortgages can always be re-negotiated

II and III

Which of the following interest calculations charges interest on accumulated interest? ........... I. discount interest method II. simple interest method III. compound interest method IV. accumulated interest method

III only

In which of the following situations would you not need life insurance?

Single with no dependents

A generalized definition of Insurance is to:

accept a small loss in exchange for transferring a large loss.

You know you can't afford the house if it's:

buydown, negative amortization, interest only loan are the only payments you can make

To generally qualify for a conventional mortgage....

total of All payments must be less than 33-38% of gross income