Question 1

A billing cycle is always 30 or 31 days.

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

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:

Accepted Answer

A)  $15,000 
B)  $17,400 
C)  $2,400 
D)  $4,200 
E)  None of these 
A)  $15,000 
B)  $17,400 
C)  $2,400 
D)  $4,200 
E)  None of these

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Vicki King bought a Ford Explorer for $23,000. Vicki made a down payment of $6,000 and paid $305 monthly for 60 months. What is the total finance charge that Vicki paid at the end of 60 months?

Accepted Answer

The answer of Vicki King bought a Ford Explorer for...

Question 7

Which one of the following statements is incorrect?

Accepted Answer

A)  APR is the true effective annual interest charged by sellers 
B)  The Truth in Lending Act regulates interest charges 
C)  APR represents the true effective annual rate of interest 
D)  None of these 
A)  APR is the true effective annual interest charged by sellers 
B)  The Truth in Lending Act regulates interest charges 
C)  APR represents the true effective annual rate of interest 
D)  None of these

Question 8

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?

Accepted Answer

A)  $457,425.60 
B)  $606,823.20 
C)  $626,863.20 
D)  $600,000.00 
E)  None of these 
A)  $457,425.60 
B)  $606,823.20 
C)  $626,863.20 
D)  $600,000.00 
E)  None of these

Question 9

Darlene Ramirez bought a home for $140,000. She put 20% down with a mortgage rate of 7.5% for 25 years. Her yearly payments are:

Accepted Answer

A)  $1,776 
B)  $9,932.16 
C)  $12,415.20 
D)  $9,329.61 
E)  None of these 
A)  $1,776 
B)  $9,932.16 
C)  $12,415.20 
D)  $9,329.61 
E)  None of these

Question 10

APR cannot be calculated by use of tables.

Accepted Answer

A) True 
 B)False

Question 11

Amortization is not a payment process.

Accepted Answer

A) True 
 B)False

Question 12

The finance charge is equal to the total of all monthly payments:

Accepted Answer

A)  Plus amount financed 
B)  Minus amount financed 
C)  Divided by amount financed 
D)  Multiplied by amount financed 
E)  None of these 
A)  Plus amount financed 
B)  Minus amount financed 
C)  Divided by amount financed 
D)  Multiplied by amount financed 
E)  None of these

Question 13

Open credit in a revolving charge plan results in:

Accepted Answer

A)  One purchase per month 
B)  The U.S. Rule being applied to each purchase 
C)  As many cash purchases till credit limit is reached 
D)  As many charged purchases till credit limit is reached 
E)  None of these 
A)  One purchase per month 
B)  The U.S. Rule being applied to each purchase 
C)  As many cash purchases till credit limit is reached 
D)  As many charged purchases till credit limit is reached 
E)  None of these

Question 14

Able Long buys a new desk for $2,400. Able will pay back $250 per month. Monthly interest is 3% on the unpaid balance. Calculate the balance outstanding after the second payment. (Use the U.S. Rule.)

Accepted Answer

The answer of Able Long buys a new desk for...

Question 15

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:

Accepted Answer

A)  $6,012.50 
B)  $5,012.50 
C)  $4,012.50 
D)  $3,012.50 
E)  None of these 
A)  $6,012.50 
B)  $5,012.50 
C)  $4,012.50 
D)  $3,012.50 
E)  None of these

Question 16

Given a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges?

Accepted Answer

A)  $50,236.80 
B)  $5,023.68 
C)  $545.76 
D)  $54,576 
E)  None of these 
A)  $50,236.80 
B)  $5,023.68 
C)  $545.76 
D)  $54,576 
E)  None of these

Question 17

Given:

Accepted Answer

A)  17.25% - 17.50 % 
B)  17.00 % 
C)  16.75 % 
D)  16.50 % 
E)  None of these 
A)  17.25% - 17.50 % 
B)  17.00 % 
C)  16.75 % 
D)  16.50 % 
E)  None of these

Question 18

Average daily balance is equal to sum of daily balances divided by number of days in the billing cycle.

Accepted Answer

A) True 
 B)False

Question 19

The APR represents the stated interest rate.

Accepted Answer

A) True 
 B)False

Question 20

Justin Chan bought a Scion car for a price of $8,200, putting down $800 and financing the remainder with 60 monthly payments of $179.99. The APR by table lookup is (use the tables in the handbook):

Accepted Answer

A)  Close to 15% 
B)  Close to 14% 
C)  Close to 13 ½% 
D)  Between 16.00 and 16.25% 
E)  None of these 
A)  Close to 15% 
B)  Close to 14% 
C)  Close to 13 ½% 
D)  Between 16.00 and 16.25% 
E)  None of these

A billing cycle is always 30 or 31 days.

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

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

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:

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

Vicki King bought a Ford Explorer for $23,000. Vicki made a down payment of $6,000 and paid $305 monthly for 60 months. What is the total finance charge that Vicki paid at the end of 60 months?

Which one of the following statements is incorrect?

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?

Darlene Ramirez bought a home for $140,000. She put 20% down with a mortgage rate of 7.5% for 25 years. Her yearly payments are:

APR cannot be calculated by use of tables.

Amortization is not a payment process.

The finance charge is equal to the total of all monthly payments:

Open credit in a revolving charge plan results in:

Able Long buys a new desk for $2,400. Able will pay back $250 per month. Monthly interest is 3% on the unpaid balance. Calculate the balance outstanding after the second payment. (Use the U.S. Rule.)

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:

Given a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges?

Given:

Average daily balance is equal to sum of daily balances divided by number of days in the billing cycle.

The APR represents the stated interest rate.

Justin Chan bought a Scion car for a price of $8,200, putting down $800 and financing the remainder with 60 monthly payments of $179.99. The APR by table lookup is (use the tables in the handbook):

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters

Exam 14: Installment Buying

A billing cycle is always 30 or 31 days.

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

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

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:

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

Vicki King bought a Ford Explorer for $23,000. Vicki made a down payment of $6,000 and paid $305 monthly for 60 months. What is the total finance charge that Vicki paid at the end of 60 months?

Which one of the following statements is incorrect?

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?

Darlene Ramirez bought a home for $140,000. She put 20% down with a mortgage rate of 7.5% for 25 years. Her yearly payments are:

APR cannot be calculated by use of tables.

Amortization is not a payment process.

The finance charge is equal to the total of all monthly payments:

Open credit in a revolving charge plan results in:

Able Long buys a new desk for $2,400. Able will pay back $250 per month. Monthly interest is 3% on the unpaid balance. Calculate the balance outstanding after the second payment. (Use the U.S. Rule.)

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:

Given a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges?

Given:

Average daily balance is equal to sum of daily balances divided by number of days in the billing cycle.

The APR represents the stated interest rate.

Justin Chan bought a Scion car for a price of $8,200, putting down $800 and financing the remainder with 60 monthly payments of $179.99. The APR by table lookup is (use the tables in the handbook):

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters