Question 1

Match the following terms with their definitions.
-Rule of 78

Accepted Answer

A) Total of all payments minus amount financed 
B) Effective interest rate 
C) A payment process 
D) A revolving charge account 
E) Sum of daily balance divided by number of days in billing cycle
F)Total of all monthly payments plus down payment
G)Used in calculation of average daily balance
H)Doesn't dictate interest rates
I)Cash price minus down payment
J)Used to calculate rebate of finance charge
K)Purchase till maximum credit reached
L)Initial cash payment 
A) Total of all payments minus amount financed 
B) Effective interest rate 
C) A payment process 
D) A revolving charge account 
E) Sum of daily balance divided by number of days in billing cycle
F)Total of all monthly payments plus down payment
G)Used in calculation of average daily balance
H)Doesn't dictate interest rates
I)Cash price minus down payment
J)Used to calculate rebate of finance charge
K)Purchase till maximum credit reached
L)Initial cash payment J

Question 2

Joyce Reed bought a used Jeep for $13,500. She put down $2,000 and paid $220 monthly for 60 months. What is the amount of finance charge Joyce will pay?

Accepted Answer

$1,700

Question 3

Jennifer Rick buys a new typewriter for $590. Jennifer puts 20% down and will pay $70 a month for the next 10 months. What is (A)the amount of the loan, (B)the total amount of monthly payments, and (C)the total of the finance charge?

Accepted Answer

A. $472; B. $700; C. $228

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Dan Miller bought a new Toyota truck for $28,000. Dan made a down payment of $6,000 and paid $390 monthly for 70 months. The total finance charge was:

Accepted Answer

A) $13,300 
B) $5,300 
C) $11,300 
D) $27,300 
E) None of these 
A) $13,300 
B) $5,300 
C) $11,300 
D) $27,300 
E) None of these

Question 6

The amount financed equals the cash price plus the down payment.

Accepted Answer

A) True 
 B)False

Question 7

Calculate APR by table lookup:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Purchase Price } & \text { Down Payment } & \begin{array} { l } 
\text { Number of } \
\text { monthly payments }
\end{array} & \begin{array} { l } 
\text { Amount } \
\text { financed }
\end{array} & \text { Total Payment } \
\hline \$ 5,950 & \$ 150 & 40 & \$ 5,800 & \$ 6,900 \
\hline
\end{array}$$

Accepted Answer

The answer of Calculate APR by table lookup:
 \[\begin{array} {...

Question 8

Calculate APR by table lookup:
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Purchase Price } & \text { Down Payment } & \begin{array} { l } 
\text { Number of } \
\text { monthly payments }
\end{array} & \begin{array} { l } 
\text { Amount } \
\text { financed }
\end{array} & \text { Total Payment } \
\hline \$ 3,000 & \$ 75 & 44 & \$ 2,925 & \$ 3,950 \
\hline
\end{array}$$

Accepted Answer

The answer of Calculate APR by table lookup:
 \[\begin{array} {...

Question 9

Mary Jones just received the following statement. Can you help her calculate (A)the average daily balance and (B)the finance charge, if finance charge is 1 ½% on the average daily balance?
$\begin{array}{l}
29 \text { Day Billing Cycle }\
\begin{array} { l l r } 
3 / 17 & \text { Prev Balance } & \$ 2,000 \
3 / 28 & \text { Payment } & \$ 100 \
4 / 3 & \text { Charge } & \$ 300
\end{array}
\end{array}$

Accepted Answer

A. $2,062.

Question 10

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) An installment loan is paid off with a series of equal periodic payments 
E) 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) An installment loan is paid off with a series of equal periodic payments 
E) None of these

Question 11

Calculate APR by table given the following:
$\begin{array} { l r } 
\text { Maytag refrigerator: } & \$ 5,000 \
\text { Down payment: } & \$ 200 \
\text { Amount financed: } & \$ 4,800 \
\text { Total of payments: } & \$ 6,900 \
\text { Number monthly payments } & 60
\end{array}$

Accepted Answer

The answer of Calculate APR by table given the following:
\(\begin{array}...

Question 12

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

Question 13

Match the following terms with their definitions.
-Deferred payment

Accepted Answer

A) Total of all payments minus amount financed 
B) Effective interest rate 
C) A payment process 
D) A revolving charge account 
E) Sum of daily balance divided by number of days in billing cycle
F)Total of all monthly payments plus down payment
G)Used in calculation of average daily balance
H)Doesn't dictate interest rates
I)Cash price minus down payment
J)Used to calculate rebate of finance charge
K)Purchase till maximum credit reached
L)Initial cash payment 
A) Total of all payments minus amount financed 
B) Effective interest rate 
C) A payment process 
D) A revolving charge account 
E) Sum of daily balance divided by number of days in billing cycle
F)Total of all monthly payments plus down payment
G)Used in calculation of average daily balance
H)Doesn't dictate interest rates
I)Cash price minus down payment
J)Used to calculate rebate of finance charge
K)Purchase till maximum credit reached
L)Initial cash payment

Question 14

Match the following terms with their definitions.
-Cash advance

Accepted Answer

A) Total of all payments minus amount financed 
B) Effective interest rate 
C) A payment process 
D) A revolving charge account 
E) Sum of daily balance divided by number of days in billing cycle
F)Total of all monthly payments plus down payment
G)Used in calculation of average daily balance
H)Doesn't dictate interest rates
I)Cash price minus down payment
J)Used to calculate rebate of finance charge
K)Purchase till maximum credit reached
L)Initial cash payment 
A) Total of all payments minus amount financed 
B) Effective interest rate 
C) A payment process 
D) A revolving charge account 
E) Sum of daily balance divided by number of days in billing cycle
F)Total of all monthly payments plus down payment
G)Used in calculation of average daily balance
H)Doesn't dictate interest rates
I)Cash price minus down payment
J)Used to calculate rebate of finance charge
K)Purchase till maximum credit reached
L)Initial cash payment

Question 15

Calculate the monthly payment by using the loan amortization table:
$\begin{array} { l l } 
\text { Loan } & \$ 8,500 \
\text { Down Payment } & \$ 2,000 \
\text { Time } & 48 \text { months } \
\text { Rate } & 10.5 \%
\end{array}$

Accepted Answer

The answer of Calculate the monthly payment by using the...

Question 16

Bill Moore bought a stereo selling for $5,800, putting down $1,200. The payment schedule was for 48 monthly payments of $117.50. What is the APR by table lookup?

Accepted Answer

@#IMG-DLM& @#IMG-DLM& Amount Financed = $5,800 -

Question 17

In calculating the daily balance, cash advances are:

Accepted Answer

A) Added in 
B) Subtracted out 
C) Sometimes added in 
D) Sometimes subtracted out 
E) None of these 
A) Added in 
B) Subtracted out 
C) Sometimes added in 
D) Sometimes subtracted out 
E) None of these

Question 18

Calculate (A)the average daily balance and (B)the finance charge, if finance charge is 1% on the average daily balance.
$\begin{array}{l}
30 \text { Day Billing Cycle }\
\begin{array} { l l r } 
4 / 20 & \text { Prev Balance } & \$ 800 \
4 / 27 & \text { Payment } & \$ 100 \
4 / 30 & \text { Charge } & \$ 300 \
5 / 9 & \text { Payment } & \$ 50 \
5 / 12 & \text { Cash Adv } & \$ 200
\end{array}
\end{array}$

Accepted Answer

A. $958.33

Question 19

Calculate (A)the average daily balance and (B)the finance charge if finance charge is 2 % on average daily balance.
$\begin{array}{l}
29 \text { Day Billing Cycle }\
\begin{array} { l l r } 
11 / 20 & \text { Prev Balance } & \$ 1,000 \
11 / 27 & \text { Payment } & \$ 200 \
11 / 30 & \text { Charge } & \$ 150 \
12 / 9 & \text { Payment } & \$ 250 \
12 / 14 & \text { Cash Adv } & \$ 400
\end{array}
\end{array}$

Accepted Answer

A. $929.31

Question 20

Marika Katz bought a $7,000 computer. Based on her income, Marika could afford to pay back only $700 per month. The charge on the unpaid balance is1$\frac {\text {1  }} { \text {2 } }$% . The U.S. Rule is used in the calculation. Calculate the balance outstanding after the second month.

Accepted Answer

The answer of Marika Katz bought a $7,000 computer. Based...

Exam 14: Installment Buying

Match the following terms with their definitions. -Rule of 78

Joyce Reed bought a used Jeep for $13,500. She put down $2,000 and paid $220 monthly for 60 months. What is the amount of finance charge Joyce will pay?

Jennifer Rick buys a new typewriter for $590. Jennifer puts 20% down and will pay $70 a month for the next 10 months. What is (A)the amount of the loan, (B)the total amount of monthly payments, and (C)the total of the finance charge?

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

Dan Miller bought a new Toyota truck for $28,000. Dan made a down payment of $6,000 and paid $390 monthly for 70 months. The total finance charge was:

The amount financed equals the cash price plus the down payment.

Calculate APR by table lookup: Purchase Price Down Payment Number of monthly payments Amount financed Total Payment \ 5,950 \ 150 40 \ 5,800 \ 6,900

Calculate APR by table lookup: Purchase Price Down Payment Number of monthly payments Amount financed Total Payment \ 3,000 \ 75 44 \ 2,925 \ 3,950

Mary Jones just received the following statement. Can you help her calculate (A)the average daily balance and (B)the finance charge, if finance charge is 1 ½% on the average daily balance? 29 Day Billing Cycle 3/17 Prev Balance \ 2,000 3/28 Payment \ 100 4/3 Charge \ 300

Which one of the following statements is incorrect?

Calculate APR by table given the following: Maytag refrigerator: \ 5,000 Down payment: \ 200 Amount financed: \ 4,800 Total of payments: \ 6,900 Number monthly payments 60

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):

Match the following terms with their definitions. -Deferred payment

Match the following terms with their definitions. -Cash advance

Calculate the monthly payment by using the loan amortization table: Loan \ 8,500 Down Payment \ 2,000 Time 48 months Rate 10.5\%

Bill Moore bought a stereo selling for $5,800, putting down $1,200. The payment schedule was for 48 monthly payments of $117.50. What is the APR by table lookup?

In calculating the daily balance, cash advances are:

Calculate (A)the average daily balance and (B)the finance charge, if finance charge is 1% on the average daily balance. 30 Day Billing Cycle 4/20 Prev Balance \ 800 4/27 Payment \ 100 4/30 Charge \ 300 5/9 Payment \ 50 5/12 Cash Adv \ 200

Calculate (A)the average daily balance and (B)the finance charge if finance charge is 2 % on average daily balance. 29 Day Billing Cycle 11/20 Prev Balance \ 1,000 11/27 Payment \ 200 11/30 Charge \ 150 12/9 Payment \ 250 12/14 Cash Adv \ 400

Marika Katz bought a $7,000 computer. Based on her income, Marika could afford to pay back only $700 per month. The charge on the unpaid balance is1 1 2 \frac {\text {1 }} { \text {2 } }2 1 ​ % . The U.S. Rule is used in the calculation. Calculate the balance outstanding after the second month.

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Marika Katz bought a $7,000 computer. Based on her income, Marika could afford to pay back only $700 per month. The charge on the unpaid balance is1 $\frac {\text {1 }} { \text {2 } }$ % . The U.S. Rule is used in the calculation. Calculate the balance outstanding after the second month.