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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-You must be a member of a [credit union | S&L] in order to borrow money there.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 3

Student loans are made by banks and other financial institutions,but students apply for these loans through their universities.

Accepted Answer

A) True 
 B)False

Question 4

The cash value of a whole life insurance policy can be used as a source of loan collateral.

Accepted Answer

A) True 
 B)False

Question 5

The average student loan in 2012 was

Accepted Answer

A)  $5,200 
B)  $10,600 
C)  $12,800 
D)  $18,400 
E)  $26,300 
A)  $5,200 
B)  $10,600 
C)  $12,800 
D)  $18,400 
E)  $26,300

Question 6

When comparing two installment loans with the same principal and APR,the loan with the longer maturity will have the lower monthly payment and the higher total costs.

Accepted Answer

A) True 
 B)False

Question 7

Consolidation loans are often used to help borrowers straighten out a critical financial situation.

Accepted Answer

A) True 
 B)False

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-There are now about [$1billion | $1 trillion] in student loans outstanding.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 9

Finance companies are generally more selective in granting loans than credit unions.

Accepted Answer

A) True 
 B)False

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-If you want to calculate whether to take the rebate or the low interest rate on an auto financing deal,it would be most useful to have [time value of money tables | a financial calculator].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 11

If you borrow money on a single payment loan and discover you cannot pay it back when it is due you should

Accepted Answer

A)  let the payment become past due. 
B)  consolidate the loan. 
C)  convert the loan to installments. 
D)  negotiate a rollover 
E)  file bankruptcy 
A)  let the payment become past due. 
B)  consolidate the loan. 
C)  convert the loan to installments. 
D)  negotiate a rollover 
E)  file bankruptcy

Question 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-[Consumer finance companies | Credit unions] obtain funds from their shareholders and through open market borrowing.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 15

Installment loans are typically repaid in one payment.

Accepted Answer

A) True 
 B)False

Question 16

Simple interest on an installment loan is charged only against the initial loan principal.

Accepted Answer

A) True 
 B)False

Question 17

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Students borrowing to pay for college should base the amount borrowed on [current income | future income].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The interest paid on a student loan [is sometimes | is not] tax deductible.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 19

Before taking out students loans,all the following should be considered except

Accepted Answer

A)  grants 
B)  federal student aid 
C)  scholarships 
D)  personal resources 
E)  all of the above 
A)  grants 
B)  federal student aid 
C)  scholarships 
D)  personal resources 
E)  all of the above

Question 20

Consumer loans are often used by individuals today to purchase nondurable items.

Accepted Answer

A) True 
 B)False

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.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You must be a member of a [credit union | S&L] in order to borrow money there.

Student loans are made by banks and other financial institutions,but students apply for these loans through their universities.

The cash value of a whole life insurance policy can be used as a source of loan collateral.

The average student loan in 2012 was

When comparing two installment loans with the same principal and APR,the loan with the longer maturity will have the lower monthly payment and the higher total costs.

Consolidation loans are often used to help borrowers straighten out a critical financial situation.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -There are now about [$1billion | $1 trillion] in student loans outstanding.

Finance companies are generally more selective in granting loans than credit unions.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If you want to calculate whether to take the rebate or the low interest rate on an auto financing deal,it would be most useful to have [time value of money tables | a financial calculator].

If you borrow money on a single payment loan and discover you cannot pay it back when it is due you should

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

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -[Consumer finance companies | Credit unions] obtain funds from their shareholders and through open market borrowing.

Installment loans are typically repaid in one payment.

Simple interest on an installment loan is charged only against the initial loan principal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Students borrowing to pay for college should base the amount borrowed on [current income | future income].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The interest paid on a student loan [is sometimes | is not] tax deductible.

Before taking out students loans,all the following should be considered except

Consumer loans are often used by individuals today to purchase nondurable items.

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.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You must be a member of a [credit union | S&L] in order to borrow money there.

Student loans are made by banks and other financial institutions,but students apply for these loans through their universities.

The cash value of a whole life insurance policy can be used as a source of loan collateral.

The average student loan in 2012 was

When comparing two installment loans with the same principal and APR,the loan with the longer maturity will have the lower monthly payment and the higher total costs.

Consolidation loans are often used to help borrowers straighten out a critical financial situation.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -There are now about [$1billion | $1 trillion] in student loans outstanding.

Finance companies are generally more selective in granting loans than credit unions.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If you want to calculate whether to take the rebate or the low interest rate on an auto financing deal,it would be most useful to have [time value of money tables | a financial calculator].

If you borrow money on a single payment loan and discover you cannot pay it back when it is due you should

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

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -[Consumer finance companies | Credit unions] obtain funds from their shareholders and through open market borrowing.

Installment loans are typically repaid in one payment.

Simple interest on an installment loan is charged only against the initial loan principal.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Students borrowing to pay for college should base the amount borrowed on [current income | future income].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The interest paid on a student loan [is sometimes | is not] tax deductible.

Before taking out students loans,all the following should be considered except

Consumer loans are often used by individuals today to purchase nondurable items.

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