Question 1

If the add-on method is used to calculate a finance charge of $100.80 on a $1,800 loan,the amount to be repaid is $1,900.80.

Accepted Answer

A) True 
 B)False

Question 2

Regarding student loans,which of the following is not true?

Accepted Answer

A)  They are available for both undergraduate and graduate students. 
B)  Applications can be filled out on the Internet. 
C)  There is no limit on how much can be borrowed. 
D)  There is no limit on the number of loans one can have. 
E)  Interest may be tax deductible. 
A)  They are available for both undergraduate and graduate students. 
B)  Applications can be filled out on the Internet. 
C)  There is no limit on how much can be borrowed. 
D)  There is no limit on the number of loans one can have. 
E)  Interest may be tax deductible.

Question 3

The majority of consumer loans are set up with fixed interest rates.

Accepted Answer

A) True 
 B)False

Question 4

Consumer loans,like open account credit,result from a rather informal process.

Accepted Answer

A) True 
 B)False

Question 5

Credit unions grant loans only to members of the credit union.

Accepted Answer

A) True 
 B)False

Question 6

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-There are now about [$1billion | $1 trillion] in student loans outstanding.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 7

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-[Public lenders | private lenders] are more flexible in providing financial relief when borrowers are under pressure.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 8

The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home.

Accepted Answer

A) True 
 B)False

Question 9

The most popular use of consumer loans is to

Accepted Answer

A)  purchase a car. 
B)  finance a college education. 
C)  finance a vacation. 
D)  buy a house. 
E)  buy furniture. 
A)  purchase a car. 
B)  finance a college education. 
C)  finance a vacation. 
D)  buy a house. 
E)  buy furniture.

Question 10

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-When the interest rate on savings is higher than the interest rate on a loan,it is less expensive to [borrow | use savings] to make a purchase.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Accepted Answer

A) True 
 B)False

Question 12

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Loan repayment of a [PLUS | Stafford] loan would begin a month after the loan is received.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 13

If you needed a loan to buy furniture,the lowest interest rate would usually be available from a

Accepted Answer

A)  savings and loan association. 
B)  pawn shop. 
C)  captive finance company. 
D)  consumer finance company. 
E)  credit union. 
A)  savings and loan association. 
B)  pawn shop. 
C)  captive finance company. 
D)  consumer finance company. 
E)  credit union.

Question 14

The annual percentage rate (APR)on a single payment loan for $1,000 at a simple interest rate of 12% is

Accepted Answer

A)  10%. 
B)  12%. 
C)  15%. 
D)  18%. 
E)  24%. 
A)  10%. 
B)  12%. 
C)  15%. 
D)  18%. 
E)  24%.

Question 15

When simple interest is used,the stated rate of interest on single payment loans is equal to the annual percentage rate (APR).

Accepted Answer

A) True 
 B)False

Question 16

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.

Accepted Answer

A) True 
 B)False

Question 17

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-The majority of single payment loans [are | are not] secured by collateral.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 18

A(n)____ clause gives the lender legal recourse in collecting the debt if the borrower does not pay.

Accepted Answer

A)  add-on 
B)  sales 
C)  acceleration 
D)  garnishment 
E)  balloon 
A)  add-on 
B)  sales 
C)  acceleration 
D)  garnishment 
E)  balloon

Question 19

In order to receive student loans,the student must be making satisfactory progress in his academic program.

Accepted Answer

A) True 
 B)False

Question 20

Jamie is going to buy some furniture with a single payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.(Show all work.)

Accepted Answer

Finance charge = $5,000 * .10

If the add-on method is used to calculate a finance charge of $100.80 on a $1,800 loan,the amount to be repaid is $1,900.80.

Regarding student loans,which of the following is not true?

The majority of consumer loans are set up with fixed interest rates.

Consumer loans,like open account credit,result from a rather informal process.

Credit unions grant loans only to members of the credit union.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -There are now about [$1billion | $1 trillion] in student loans outstanding.

The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home.

The most popular use of consumer loans is to

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Loan repayment of a [PLUS | Stafford] loan would begin a month after the loan is received.

If you needed a loan to buy furniture,the lowest interest rate would usually be available from a

The annual percentage rate (APR)on a single payment loan for $1,000 at a simple interest rate of 12% is

When simple interest is used,the stated rate of interest on single payment loans is equal to the annual percentage rate (APR).

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of single payment loans [are | are not] secured by collateral.

A(n)____ clause gives the lender legal recourse in collecting the debt if the borrower does not pay.

In order to receive student loans,the student must be making satisfactory progress in his academic program.

Jamie is going to buy some furniture with a single payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.(Show all work.)

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 7: Using Consumer Loans

If the add-on method is used to calculate a finance charge of $100.80 on a $1,800 loan,the amount to be repaid is $1,900.80.

Regarding student loans,which of the following is not true?

The majority of consumer loans are set up with fixed interest rates.

Consumer loans,like open account credit,result from a rather informal process.

Credit unions grant loans only to members of the credit union.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -There are now about [$1billion | $1 trillion] in student loans outstanding.

The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home.

The most popular use of consumer loans is to

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Loan repayment of a [PLUS | Stafford] loan would begin a month after the loan is received.

If you needed a loan to buy furniture,the lowest interest rate would usually be available from a

The annual percentage rate (APR)on a single payment loan for $1,000 at a simple interest rate of 12% is

When simple interest is used,the stated rate of interest on single payment loans is equal to the annual percentage rate (APR).

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan,the amount to be repaid is $2,200.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of single payment loans [are | are not] secured by collateral.

A(n)____ clause gives the lender legal recourse in collecting the debt if the borrower does not pay.

In order to receive student loans,the student must be making satisfactory progress in his academic program.

Jamie is going to buy some furniture with a single payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.(Show all work.)

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters