Question 1

If a new-car loan costs 6%, a used-car loan would cost approximately ___ percent.

Accepted Answer

A)  0 
B)  1 
C)  6 
D)  7 
E)  12 
A)  0 
B)  1 
C)  6 
D)  7 
E)  12

Question 2

Which interest formula may be used by creditors to determine how much interest you have paid at any point in a loan?

Accepted Answer

A)  Simple interest formula 
B)  Compound interest formula 
C)  Multiple compound interest formula 
D)  The rule of 78s 
E)  The rule of 72s 
A)  Simple interest formula 
B)  Compound interest formula 
C)  Multiple compound interest formula 
D)  The rule of 78s 
E)  The rule of 72s

Question 3

For some debtors, bankruptcy has become an acceptable tool of credit management.

Accepted Answer

A) True 
 B)False

Question 4

In addition to the counseling services of the CCCS, nonprofit services are sometimes provided by:

Accepted Answer

A)  universities. 
B)  military bases. 
C)  credit unions. 
D)  state and federal authorities. 
E)  All of these organizations 
A)  universities. 
B)  military bases. 
C)  credit unions. 
D)  state and federal authorities. 
E)  All of these organizations

Question 5

Jerrod Dean starts the month with a balance on his credit card of $1,000. On the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card of $500. The bank charges 1.5 percent interest per month using the adjusted balance method. What would Jerrod's finance charges be for the month?

Accepted Answer

A)  $7.50 
B)  $13.25 
C)  $11.25 
D)  $15.00 
E)  $18.00 
A)  $7.50 
B)  $13.25 
C)  $11.25 
D)  $15.00 
E)  $18.00

Question 6

Gary Simpson notices that his neighbor has a brand new Ford F150 truck parked in the driveway. Even though his current car is fine, Gary decides that he needs a new car and goes out and purchases a Hummer with a six-year loan. Which one of the answers best explains Gary's spending?

Accepted Answer

A)  Misunderstanding or lack of communication 
B)  The use of money to punish 
C)  The expectation of instant comfort 
D)  Keeping up with the Joneses 
E)  Overindulgence of children 
A)  Misunderstanding or lack of communication 
B)  The use of money to punish 
C)  The expectation of instant comfort 
D)  Keeping up with the Joneses 
E)  Overindulgence of children

Question 7

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager. He finds the house he wants and gets an interest-only loan on it for the first five years. Which one of the answers best explains Jeff's spending?

Accepted Answer

A)  Misunderstanding or lack of communication 
B)  The use of money to punish 
C)  The expectation of instant comfort 
D)  Keeping up with the Joneses 
E)  Overindulgence of children 
A)  Misunderstanding or lack of communication 
B)  The use of money to punish 
C)  The expectation of instant comfort 
D)  Keeping up with the Joneses 
E)  Overindulgence of children

Question 8

What are the various methods used to calculate interest?

Accepted Answer

The answer of What are the various methods used to...

Question 9

Which one of these methods is the fairest of calculating interest?

Accepted Answer

A)  Declining balance 
B)  Adjusted balance 
C)  Average daily balance excluding purchases 
D)  Average daily including purchases method 
E)  Previous balance method 
A)  Declining balance 
B)  Adjusted balance 
C)  Average daily balance excluding purchases 
D)  Average daily including purchases method 
E)  Previous balance method

Question 10

You have two choices in declaring personal bankruptcy: Chapter 7 and Chapter 13 bankruptcy.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following methods calculates interest on the full amount of the original principal?

Accepted Answer

A)  Declining balance method 
B)  Add-on interest method 
C)  Simple interest method 
D)  Adjusted balance method 
E)  Average daily balance method 
A)  Declining balance method 
B)  Add-on interest method 
C)  Simple interest method 
D)  Adjusted balance method 
E)  Average daily balance method

Question 12

Explain the concept of "float."

Accepted Answer

The answer of Explain the concept of "float."...

Question 13

A few months ago, you sent a certified letter to a debt collector and requested verification of a debt the collector says you owe. You know the letter was received by the collector but you have received no response to your request. Today, you received a letter threatening court action. What should you do?

Accepted Answer

A)  Pay the debt and protect your credit rating 
B)  Insist that communications about the debt cease 
C)  Renegotiate payment terms with the creditor 
D)  Sue the collection agency 
E)  Pay half the outstanding balance 
A)  Pay the debt and protect your credit rating 
B)  Insist that communications about the debt cease 
C)  Renegotiate payment terms with the creditor 
D)  Sue the collection agency 
E)  Pay half the outstanding balance

Question 14

When more than one payment is made on a simple interest loan, the method of computing interest is known as the:

Accepted Answer

A)  add-on interest method. 
B)  average daily balance method. 
C)  adjusted balance method. 
D)  declining balance method. 
E)  previous balance method. 
A)  add-on interest method. 
B)  average daily balance method. 
C)  adjusted balance method. 
D)  declining balance method. 
E)  previous balance method.

Question 15

If you find that you cannot make your payments, the first thing you should do is:

Accepted Answer

A)  skip town. 
B)  declare personal bankruptcy. 
C)  borrow from a loan shark to make the payment. 
D)  let the borrower go to a collection agency. 
E)  contact your creditors and try to work out a modified payment plan with them. 
A)  skip town. 
B)  declare personal bankruptcy. 
C)  borrow from a loan shark to make the payment. 
D)  let the borrower go to a collection agency. 
E)  contact your creditors and try to work out a modified payment plan with them.

Question 16

Which type of debt would not be forgiven in a straight bankruptcy?

Accepted Answer

A)  Credit card debt 
B)  Medical bills 
C)  Personal loans 
D)  Educational loans 
E)  Utility bills 
A)  Credit card debt 
B)  Medical bills 
C)  Personal loans 
D)  Educational loans 
E)  Utility bills

Question 17

The fairest method of calculating interest is the average daily balance method.

Accepted Answer

A) True 
 B)False

Question 18

What is(are) the signal(s) of potential debt problems?

Accepted Answer

A)  Paying only the minimum balance each month 
B)  Missing payments or paying late 
C)  Using savings to pay normal bills 
D)  Depending on overtime to meet normal expenses 
E)  All of these are danger signals 
A)  Paying only the minimum balance each month 
B)  Missing payments or paying late 
C)  Using savings to pay normal bills 
D)  Depending on overtime to meet normal expenses 
E)  All of these are danger signals

Question 19

Overindulgence of children is a signal of potential debt problems.

Accepted Answer

A) True 
 B)False

Question 20

Inflation increases the purchasing power of money.

Accepted Answer

A) True 
 B)False

If a new-car loan costs 6%, a used-car loan would cost approximately ___ percent.

Which interest formula may be used by creditors to determine how much interest you have paid at any point in a loan?

For some debtors, bankruptcy has become an acceptable tool of credit management.

In addition to the counseling services of the CCCS, nonprofit services are sometimes provided by:

Gary Simpson notices that his neighbor has a brand new Ford F150 truck parked in the driveway. Even though his current car is fine, Gary decides that he needs a new car and goes out and purchases a Hummer with a six-year loan. Which one of the answers best explains Gary's spending?

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager. He finds the house he wants and gets an interest-only loan on it for the first five years. Which one of the answers best explains Jeff's spending?

What are the various methods used to calculate interest?

Which one of these methods is the fairest of calculating interest?

You have two choices in declaring personal bankruptcy: Chapter 7 and Chapter 13 bankruptcy.

Which of the following methods calculates interest on the full amount of the original principal?

Explain the concept of "float."

When more than one payment is made on a simple interest loan, the method of computing interest is known as the:

If you find that you cannot make your payments, the first thing you should do is:

Which type of debt would not be forgiven in a straight bankruptcy?

The fairest method of calculating interest is the average daily balance method.

What is(are) the signal(s) of potential debt problems?

Overindulgence of children is a signal of potential debt problems.

Inflation increases the purchasing power of money.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 7: Choosing a Source of Credit: The Costs of Credit Alternatives

If a new-car loan costs 6%, a used-car loan would cost approximately ___ percent.

Which interest formula may be used by creditors to determine how much interest you have paid at any point in a loan?

For some debtors, bankruptcy has become an acceptable tool of credit management.

In addition to the counseling services of the CCCS, nonprofit services are sometimes provided by:

Gary Simpson notices that his neighbor has a brand new Ford F150 truck parked in the driveway. Even though his current car is fine, Gary decides that he needs a new car and goes out and purchases a Hummer with a six-year loan. Which one of the answers best explains Gary's spending?

Jeff Bloom wants to have a house just like the one his parents had when he was a teenager. He finds the house he wants and gets an interest-only loan on it for the first five years. Which one of the answers best explains Jeff's spending?

What are the various methods used to calculate interest?

Which one of these methods is the fairest of calculating interest?

You have two choices in declaring personal bankruptcy: Chapter 7 and Chapter 13 bankruptcy.

Which of the following methods calculates interest on the full amount of the original principal?

Explain the concept of "float."

When more than one payment is made on a simple interest loan, the method of computing interest is known as the:

If you find that you cannot make your payments, the first thing you should do is:

Which type of debt would not be forgiven in a straight bankruptcy?

The fairest method of calculating interest is the average daily balance method.

What is(are) the signal(s) of potential debt problems?

Overindulgence of children is a signal of potential debt problems.

Inflation increases the purchasing power of money.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters