Chapter 14 Quiz 1

Jackie Flynn bought a new boat for $16,000. She put a $3,000 down payment on it. The bank’s loan was for 60 months. Finance charges totaled $4,800. Her monthly payment is:
The APR represents the: True effective annual rate of interest charged by seller
The finance charge is equal to the total of all monthly payments: Less amount financed
The amount financed equals the cash price plus down payment. False
The average daily balance is equal to the sum of daily balances: Divided by number of days in billing cycle
Today most companies calculate finance charge on their credit card accounts as a percentage of the yearly balance. False
Ruth Sloan bought a new car for $20,000. She put down $6,000 and paid $280 for 60 months. The total finance charge to Ruth is: $2,800
Revolving charge accounts must be completely paid off by end of the month. False
The U.S. Rule can be applied to open credit payments. True
The Fair Credit and Charge Card Disclosure Act of 1988 is optional advice to credit card companies. False
Which one of the following statements is incorrect? The Truth in Lending Act regulates interest charges
APR cannot by calculated by use of tables. False
The APR represents the stated interest rate. False
The Truth in Lending Act regulates interest charges. False
The Truth in Lending Act requires the APR be accurately stated to nearest 1/4 of 1 percent. True
Amortization is not a payment process. False
Most companies calculate the finance charge on credit card accounts as a percentage of the: Average daily balance
Finance charge equals total of all monthly payments less amount financed. True
Amount financed is equal to: Cash price less down payment
The cost of credit reports is normally included in the amount financed. True

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