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

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-[Public lenders | private lenders] of student loans are more flexible in providing financial relief when borrowers are under pressure.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 3

Calculate the finance charge and the monthly payment on a $20,000 add-on installment loan with an interest rate of 9% and a term of 5 years.(Show all work.)

Accepted Answer

Finance charge = $20

Question 4

The add-on method is less expensive than the simple interest method when stated rates of interest are identical.

Accepted Answer

A) True 
 B)False

Question 5

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Borrowers are more likely to ask for a(n)[single payment | installment payment] consumer loan.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 6

Regarding student loans,which of the following is true?

Accepted Answer

A) They are available only for undergraduate students. 
B) Parents (or legal guardians) must cosign. 
C) There is a limit on how much can be borrowed wirh each loan. 
D) There is a limit on the number of loans one can have. 
E) Interest does not have to be repaid. 
A) They are available only for undergraduate students. 
B) Parents (or legal guardians) must cosign. 
C) There is a limit on how much can be borrowed wirh each loan. 
D) There is a limit on the number of loans one can have. 
E) Interest does not have to be repaid.

Question 7

Long-term financial goals often depend on borrowing funds.The type of loan that generally does not fulfill the long-term goal achievement is ____ loans.

Accepted Answer

A) consumer 
B) installment 
C) automobile 
D) mortgage 
E) single-payment 
A) consumer 
B) installment 
C) automobile 
D) mortgage 
E) single-payment

Question 8

When loaning money to a friend or family member,it is advisable to lend only the amount that you can afford to give away.

Accepted Answer

A) True 
 B)False

Question 9

It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates.

Accepted Answer

A) True 
 B)False

Question 10

Even if you do have money,you may still be better off using an installment loan for a big-ticket purchase.

Accepted Answer

A) True 
 B)False

Question 11

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

Commercial banks generally charge lower interest rates than other lending institutions because

Accepted Answer

A) they make shorter-term loans. 
B) they usually take only the best credit risks. 
C) depositors require lower rates. 
D) they get their funds in the open credit market. 
E) they make secured loans only. 
A) they make shorter-term loans. 
B) they usually take only the best credit risks. 
C) depositors require lower rates. 
D) they get their funds in the open credit market. 
E) they make secured loans only.

Question 13

A loan against the cash value of your life insurance policy would be characterized by

Accepted Answer

A) increased death benefits to beneficiaries. 
B) increased premiums. 
C) unchanged death benefits available to beneficiaries. 
D) no specific repayment date. 
E) annual percentage rates higher than other sources. 
A) increased death benefits to beneficiaries. 
B) increased premiums. 
C) unchanged death benefits available to beneficiaries. 
D) no specific repayment date. 
E) annual percentage rates higher than other sources.

Question 14

Because no written contract is usually required,borrowing from friends and relatives is advisable.

Accepted Answer

A) True 
 B)False

Question 15

A legal claim that allows creditors to liquidate loan collateral is a

Accepted Answer

A) loan. 
B) note. 
C) security claim. 
D) lien. 
E) none of these 
A) loan. 
B) note. 
C) security claim. 
D) lien. 
E) none of these

Question 16

Savings and loan associations dominate the consumer loan market.

Accepted Answer

A) True 
 B)False

Question 17

Student loans are not dischargeable in Chapter 13 bankruptcy proceedings.

Accepted Answer

A) True 
 B)False

Question 18

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-[Installment | Single-payment] loans are used as interim financing when the funds to be used for repayment are known to be forthcoming.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 19

A single-payment loan is advantageous only if

Accepted Answer

A) the interest rate is less than on an installment loan. 
B) funds will be available to repay the lump sum. 
C) figured with the discount method. 
D) figured with the simple interest method. 
E) it is unsecured. 
A) the interest rate is less than on an installment loan. 
B) funds will be available to repay the lump sum. 
C) figured with the discount method. 
D) figured with the simple interest method. 
E) it is unsecured.

Question 20

To qualify for a Stafford loan,you must

Accepted Answer

A) demonstrate financial need. 
B) have a good credit rating. 
C) make satisfactory academic progress. 
D) all of the above 
E) a and c only 
A) demonstrate financial need. 
B) have a good credit rating. 
C) make satisfactory academic progress. 
D) all of the above 
E) a and c only

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.

Calculate the finance charge and the monthly payment on a $20,000 add-on installment loan with an interest rate of 9% and a term of 5 years.(Show all work.)

The add-on method is less expensive than the simple interest method when stated rates of interest are identical.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Borrowers are more likely to ask for a(n)[single payment | installment payment] consumer loan.

Regarding student loans,which of the following is true?

Long-term financial goals often depend on borrowing funds.The type of loan that generally does not fulfill the long-term goal achievement is ____ loans.

When loaning money to a friend or family member,it is advisable to lend only the amount that you can afford to give away.

It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates.

Even if you do have money,you may still be better off using an installment loan for a big-ticket purchase.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

Commercial banks generally charge lower interest rates than other lending institutions because

A loan against the cash value of your life insurance policy would be characterized by

Because no written contract is usually required,borrowing from friends and relatives is advisable.

A legal claim that allows creditors to liquidate loan collateral is a

Savings and loan associations dominate the consumer loan market.

Student loans are not dischargeable in Chapter 13 bankruptcy proceedings.

A single-payment loan is advantageous only if

To qualify for a Stafford loan,you must

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.

Calculate the finance charge and the monthly payment on a $20,000 add-on installment loan with an interest rate of 9% and a term of 5 years.(Show all work.)

The add-on method is less expensive than the simple interest method when stated rates of interest are identical.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Borrowers are more likely to ask for a(n)[single payment | installment payment] consumer loan.

Regarding student loans,which of the following is true?

Long-term financial goals often depend on borrowing funds.The type of loan that generally does not fulfill the long-term goal achievement is ____ loans.

When loaning money to a friend or family member,it is advisable to lend only the amount that you can afford to give away.

It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates.

Even if you do have money,you may still be better off using an installment loan for a big-ticket purchase.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

Commercial banks generally charge lower interest rates than other lending institutions because

A loan against the cash value of your life insurance policy would be characterized by

Because no written contract is usually required,borrowing from friends and relatives is advisable.

A legal claim that allows creditors to liquidate loan collateral is a

Savings and loan associations dominate the consumer loan market.

Student loans are not dischargeable in Chapter 13 bankruptcy proceedings.

A single-payment loan is advantageous only if

To qualify for a Stafford loan,you must

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