AnswersPersonal Finance - EL3403Mortgages and Home Ownership

Mortgages and Home Ownership — Unit test Answers

15 verified answers
1
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This table can be used to organize Gigi’s credit card balances and payments over 6 months. The annual percentage rate on the credit card is 14%.Gigi’s Credit Card PaymentsMonthBalancePaymentInterest RateInterest Charged1$650$3000.01167$4.082$354.08$500.01167 3$307.63$500.01167 4$260.64$500.01167 5$213.10$500.01167 6$165$500.01167 What is the amount of interest charged for the first 6 months?$

A
16.34
B
17.34
C
18.34
D
19.34
2
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Jessica is trying to get a credit card. She has a credit score of 790. How is Jessica’s lender likely to view this credit score?

J
Jessica is low risk and will pay her outstanding balances on time.
J
Jessica is low risk but will not pay her outstanding balances on time.
J
Jessica is high risk and will pay her outstanding balances on time.
J
Jessica is high risk but will not pay her outstanding balances on time.
3

Melanie is very concerned with avoiding late fees. The table shows her choices for paying her bills. MethodBill Payment Methods1Pay by check2Pay online3Set up automatic payments4Pay by telephoneWhich method should she use to pay her bills? Enter the response using the corresponding method number.

Answer not available
4

The chart describes four people’s credit histories.Creditworthy CriteriaNameDescription of Credit HistoryEllieHas more debt than earningsCollinPays only some of his bills every monthJacobHas made three late payments in the past yearEeshaPays more than the minimum payment each monthWhich person is creditworthy?EllieCollinJacobEesha

A
Ellie
B
Collin
C
Jacob
D
Eesha
5

The charts show the effect of an interest rate adjustment on an adjustable-rate mortgage.The change in interest rate shown in the charts resulted in

Question illustration
a
a lower interest rate.
a
a higher principal.
a
a higher monthly payment.
a
a higher number of payments.
6

Yuri wants to pay for his new chair using a check. What must he consider before using that method of payment?

A
Yuri must check his credit history.
B
Yuri must know the interest rate on a furniture loan.
C
Yuri must be sure he has enough left in his checking account for any expenses and automatic payments.
D
Yuri must check his credit card balance.
7

What are possible advantages and disadvantages of using automatic withdrawal to pay bills? Check all that apply.

A
not having to keep track of the balance in a checking account
B
avoiding late payment fees
C
having to share your account information
D
not having to find a stamp and a mailbox
E
not knowing when the payment will be taken out of your account
F
possible overdraft fees if there is not enough money in the account to cover the payment amount
G
having to pay a fee for the service
8

most likely

p
plan to rent out their homes.
m
must repay the loan in five to ten years.
a
are unwilling to accept any risk in borrowing money.
r
remain in their homes for 30 years or more.
9

A mortgage is a legal agreement between a borrower and a

c
city agency.
f
family court judge.
w
wealthy relative.
b
bank.
10

Which describes the difference between a personal loan and a credit card?

A
Credit cards offer lump sums of money, while personal loans set a maximum amount a person can borrow.
B
Credit cards are secured loans for large amounts, while personal loans are unsecured for small purchases.
C
Personal loans offer lump sums of money, while credit cards set a maximum amount a person can borrow.
D
Personal loans are secured for small purchases, while credit cards are unsecured loans for large amounts.
11

A down payment is usually what percentage of the asking price of a home?

0
0–5 percent
5
5–20 percent
2
20–50 percent
5
50–75 percent
12

If a borrower provides collateral and fails to repay the loan,

A
the borrower may cancel the loan to get the collateral.
B
the lender can sell the collateral to cover losses.
C
the borrower must buy the collateral back.
D
the lender keeps the collateral in case of late payment.
13

When applying for credit, what information should borrowers research? Check all that apply.feesgovernment regulationsinterest ratesintroductory ratesrequired repayments

f
fees
g
government regulations
i
interest rates
i
introductory rates
r
required repayments
14

The table shows a schedule of the first year of Kamil’s payment plan for a car. Kamil’s Payment Plan for the First YearYearBalanceMonthly PaymentEnd of YearBalance1$13,086.72$363.52$8,724.48 How many years will it take Kamil to pay off the loan?

A
1 year
B
2 years
C
3 years
D
4 years
15

Which are considered types of credit available to borrowers? Check all that apply.personal loansbondscredit cardsmortgagescashauto loansgift cards

A
personal loans
B
bonds
C
credit cards
D
mortgages
E
cash
F
auto loans
G
gift cards

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