Exam 14: Installment Buying

Mia Lane bought a high-definition television for $7,500. Based on her income, she could afford to pay back only $600 per month. There is 1 ½% monthly interest charge on the unpaid balance. The U.S. Rule is used in the calculation. At the end of month 1, the balance outstanding is:

John Sullivan bought a new Brunswick boat for $17,000. He made a $2,500 down payment on it. The bank's loan was for 60 months. Finance charges totaled $4,900. His monthly payment is:

The monthly payment is calculated by totaling the finance charge and amount financed and dividing that by the number of payments of the loan.

Jen purchased a condo in Naples, Florida, for $699,000. She put 20% down and financed the rest at 5% for 35 years. What are Jen's total finance charges?

Revolving charge accounts must be paid off completely by the end of the month.

Which one of the following statements is incorrect?

The average daily balance is equal to the sum of daily balances:

Amount financed is equal to:

Most companies calculate the finance charge on credit card accounts as a percentage of the:

The Truth in Lending Act requires that the APR be stated accurately to the nearest 1/4 of 1%.

Today most companies calculate the finance charge on their credit card accounts as a percentage of the yearly balance.

Finance charge equals total of all monthly payments minus amount financed.

Given the following: The average daily balance is:

Amanda Chin purchased a home for $296,000; she put 20% down with a mortgage rate of 6% for 30 years. What is Amanda's monthly payment?

In calculating the daily balance, cash advances are:

Amortization is not a payment process.

Ed Sloan bought a new Explorer for $22,000. He put down $7,000 and paid $290 for 60 months. The total finance charge to Ed is:

The cost of credit reports would be included in the amount financed.

The U.S. Rule can be applied to open credit payments.

The Fair Credit and Charge Card Disclosure Act of 1988 is optional advice to credit card companies.