Final Personal Finance Chap 7-9

Hillary Harlan borrows $2000 from her credit union to purchase a new computer. This is an example of a …. Cash loan – A
An unsecured loan requires… A cosigner and collateralCollateral and a lienA cosigner and a lienNONE OF THESE – D
Which of the following credit contract clauses requires that all remaining payments on an installment debt be paid on demand of the creditor after a specific number of payments are unpaid? Acceleration – B
Vickie wants to borrow $5000 for three years. She will repay the $5000 plus the finance charges in one lump sum at the end of the three year period. If the lender charges her 12% simple interest, how much will Vickie pay in finance charges? $18000 – B5000 * 0.12
Using the rule of 78s, a borrower who repaid a 12-month loan after only 5 months would save ____________ of his or her interest. 28/78 – D
Which type of credit cards are issued through banks, savings and loans, and credit unions across the country? Bank credit card accounts – B
Revenues for bank credit cards are generated from … Annual membership feesFinance chargesFees paid by participating merchantsALL OF THESE – D
“Gold”, “Silver”, or “Platinum” cards are all examples of _______ cards… Prestige – B
Credit card costs can include… Annual FeesInterestTransaction FeesALL OF THESE – D
Kay harden had three credit cards in her billfold when her wallet was stolen. She reported the cards missing as soon as she discovered the loss (one day), but the following charges were incurred before she reported the stolen cards: How much is Kay’s maximum legal liability for the fraudulent charges on theses cards? $125 – D
If you are a person who always pays off the Toal outstanding balance on your credit card each month, which of the following aspects of the credit card agreement will you be LEAST interested in? (assume 25 day grace period) Annual interest rate – A
Buying items you will really use on sale will ___________ money. SAVE – TRUE
wants are ___________ necessities – false
The trade in value of your car is available on the websites for the National Automobile Dealers Association, Edmunds, or Kelley Blue Book. True
A limited warranty covers free parts and labor. True
Buying without fully considering priorities and alternatives is called … Impulse buying – A
____________ Should be completed before interacting with sellers. Distinguishing between needs and wantsPreshopping researchFitting the budgetALL OF THESE – D
APR stands for… Annual percentage rate – C
What does it mean in auto leasing and auto financing when you are said to be upside down? You owe more on the car than it is worth …
The process of comparing products or services to find what you think is the Best Buy is called … Comparison shopping – C
Which is NOT an additional charge when leasing an automobile? Residual value – C
Jessie Ridely just bought an SUV and financed it with an automobile loan. She will pay 48 monthly payments of $425 each and one final payment of $3000. What type of clause is in her sales contract? Balloon – C
A service contract offers free or low cost repairs to the product… For a specified period of time – D
Service contracts are also called _________ warrants. Extended – C
Most people should not make buying decisions for expensive purchases… Inside a retail store or in a showroom – D
The term used to describe righting a wrong is … Redress – B
Justin has a 3 year closed end lease on his Prius. His contract stipulates a $0.31 per mile excess mileage charge in excess of 39000 miles. If he actually drove the vehicle 45000 miles during the three years, he would be charged an extra ______________ 1860 – B45000-39000 = 60006000 * 0.31 = 1860.00
Subleasing means leasing the property from the original tenant to another tenant before the lease expires. True
With a cooperative, the owner holds a share of the corporation that owns and manages a group of housing units. True
Credit scores are not related to the information in your credit report. False
A prospective borrower must be given a good faith estimate of all specific closing costs. True
The interest rate on a second mortgage is generally lower than the interest rate on the original mortgage False
A renter Amy have to pay ______ when moving into an apartment. The First month’s rentThe last month’s rentThe security depositALL OF THESE – D
_________has (have) historically been favored by Americans as the most preferable housing alternative. Single family dwellings – A
______________ rarely appreciate(s) in value. Mobile homes – A
Using a front end ratio of 24%, one would need an annual gross income of AT LEAST__________ to buy a home with a total monthly payments of $1245 62250 – C1245/0.24 = 5187.505187.50 * 12 = 62250
Sally and Jason Abel would like to purchase a home with the following monthly expenses: The ables need to have an annual gross income of AT LEAST _____________ in order to qualify for a loan if the front end ratio requirement is 26% 73615 – C1595/26% = 6134.626134.62 * 12 = 73615
The residual value is the projected v value of the leased asset at the beginning of the lease time period. False
Lenders use ____________- ratios when setting limits on how much a home buyer can borrow. Front-end and back-end – A
The formal legal document that outlines the actual agreement to buy a house is called a(n) Purchase contract – C orOffer to purchase – A
A loan to purchase real estate in which the real estate itself serves as collateral is a _____________ loan. Mortgage – A
Martha and Gordon purchased a home for $175000 six years ago with an 7.5%, 30 year $140000 mortgage. Their home now has a market value of $210000 and they owe $134000 on the mortgage. What is the equity in their home? $76000 – A 210000-134000 = 76000
If the lender requires an 85% loan to value ratio, the borrower will have to make a ________________ percent down payment 15 – B
Making a larger than required down payment on a given home will… reduce the amount of the monthly payments – A
Mike and Anita make a $460 house payment every other week. Their loan is an example of a _____________ mortgage. Biweekly – B
The mortgage clause that prohibits a seller from letting a new buyer assume the mortgage is the ___________ clause due on sale – A
A land contract is also called a … real estate contract – A or Contract for deed – D

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