Question 1

The monthly payment on an 8%,36-month,add-on loan for $10,000 would be:

Accepted Answer

A)  $278 
B)  $300 
C)  $314 
D)  $344 
E)  $380 
A)  $278 
B)  $300 
C)  $314 
D)  $344 
E)  $380

Question 2

Cash value loans are available from all types of life insurance policies.

Accepted Answer

A) True 
 B)False

Question 3

Variable rate loans are desirable if interest rates are expected to increase over the course of the loan.

Accepted Answer

A) True 
 B)False

Question 4

A personal consumer loan could be used to:

Accepted Answer

A)  plan a vacation. 
B)  purchase a car. 
C)  cover a temporary cash shortfall. 
D)  buy a mobile home. 
E)  do all these things. 
A)  plan a vacation. 
B)  purchase a car. 
C)  cover a temporary cash shortfall. 
D)  buy a mobile home. 
E)  do all these things.

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.
-Loan repayment of a [Perkins | PLUS] loan would not begin until a student is out of school.

Accepted Answer

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

Question 6

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.
-When the interest rate on savings is higher than the interest rate on a loan,it is less expensive to [borrow | use savings] to make a purchase.

Accepted Answer

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

Question 7

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 discount method. 
D)  figured with 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 discount method. 
D)  figured with simple interest method. 
E)  it is unsecured.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Calculate the average percentage rate (APR)for an add-on loan with 36 monthly installments.The principal is $4,000; the stated interest rate is 6%.

Accepted Answer

Set P/Y key to 12 and enter th

Question 10

If your installment loan has a variable interest rate:

Accepted Answer

A)  the rate will remain the same over the life of the loan. 
B)  the amount you borrowed will change with interest rates. 
C)  you cannot accurately predict the total interest you will pay on the loan. 
D)  you can calculate the total interest you will pay on the loan. 
E)  your monthly loan payment will remain the same for all the months.. 
A)  the rate will remain the same over the life of the loan. 
B)  the amount you borrowed will change with interest rates. 
C)  you cannot accurately predict the total interest you will pay on the loan. 
D)  you can calculate the total interest you will pay on the loan. 
E)  your monthly loan payment will remain the same for all the months..

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.
-The longer the loan maturity,the [lower | higher] the total finance costs will be.

Accepted Answer

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

Question 12

A characteristic of consumer loans is that they:

Accepted Answer

A)  include a negotiated contract. 
B)  are arrived at through a formal process. 
C)  include a repayment schedule. 
D)  are used to purchase big-ticket durable goods and other items. 
E)  are all of these 
A)  include a negotiated contract. 
B)  are arrived at through a formal process. 
C)  include a repayment schedule. 
D)  are used to purchase big-ticket durable goods and other items. 
E)  are all of these

Question 13

The collateral for an installment loan is seized and liquidated by the lender if the borrower has paid the loan in full.

Accepted Answer

A) True 
 B)False

Question 14

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.
-Students borrowing to pay for college should base the amount borrowed on [current income | future income].

Accepted Answer

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

Question 15

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.
-You are borrowing $5,000 at 9%.You may choose a 24 or 36 month repayment plan.The total finance cost will be higher with the [24 | 36] month plan.

Accepted Answer

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

Question 16

The most popular use of consumer loans is to:

Accepted Answer

A)  purchase a car. 
B)  finance a college education. 
C)  finance a vacation. 
D)  buy a house. 
E)  buy furniture. 
A)  purchase a car. 
B)  finance a college education. 
C)  finance a vacation. 
D)  buy a house. 
E)  buy furniture.

Question 17

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 18

Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time.

Accepted Answer

A) True 
 B)False

Question 19

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.
-[Consumer finance companies | Credit unions] obtain funds from their shareholders and through open market borrowing.

Accepted Answer

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

Question 20

_____ loans do not have to be repaid until after you graduate from college.

Accepted Answer

A)  Stafford and Perkins 
B)  Stafford and PLUS 
C)  Perkins and PLUS 
D)  PLUS and SLS 
E)  Perkins and SLS 
A)  Stafford and Perkins 
B)  Stafford and PLUS 
C)  Perkins and PLUS 
D)  PLUS and SLS 
E)  Perkins and SLS

The monthly payment on an 8%,36-month,add-on loan for $10,000 would be:

Cash value loans are available from all types of life insurance policies.

Variable rate loans are desirable if interest rates are expected to increase over the course of the loan.

A personal consumer loan could be used to:

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. -Loan repayment of a [Perkins | PLUS] loan would not begin until a student is out of school.

A single-payment loan is advantageous only if:

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

Calculate the average percentage rate (APR)for an add-on loan with 36 monthly installments.The principal is $4,000; the stated interest rate is 6%.

If your installment loan has a variable interest rate:

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. -The longer the loan maturity,the [lower | higher] the total finance costs will be.

A characteristic of consumer loans is that they:

The collateral for an installment loan is seized and liquidated by the lender if the borrower has paid the loan in full.

The most popular use of consumer loans is to:

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

Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time.

_____ loans do not have to be repaid until after you graduate from college.

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

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Exam 7: Using Consumer Loans

The monthly payment on an 8%,36-month,add-on loan for $10,000 would be:

Cash value loans are available from all types of life insurance policies.

Variable rate loans are desirable if interest rates are expected to increase over the course of the loan.

A personal consumer loan could be used to:

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. -Loan repayment of a [Perkins | PLUS] loan would not begin until a student is out of school.

A single-payment loan is advantageous only if:

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

Calculate the average percentage rate (APR)for an add-on loan with 36 monthly installments.The principal is $4,000; the stated interest rate is 6%.

If your installment loan has a variable interest rate:

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. -The longer the loan maturity,the [lower | higher] the total finance costs will be.

A characteristic of consumer loans is that they:

The collateral for an installment loan is seized and liquidated by the lender if the borrower has paid the loan in full.

The most popular use of consumer loans is to:

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

Consolidation loans are used to purchase new furniture and appliances when many items are needed at the same time.

_____ loans do not have to be repaid until after you graduate from college.

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