AnswersSNHS NV-Civics and EconomicsUnderstanding College Savings

Understanding College Savings — Unit test Answers

15 verified answers9 views
1
Free Preview

Which of the following statements is true?

A
A 30 year fixed mortgage will always result in the lowest payment.
B
You must have at least a 20% down payment to get a competitive interest rate.
C
The lower your interest rate is, the lower your monthly payments are.
D
The faster you pay off your mortgage, the lower your monthly payments are.
2
Free Preview

The Johnsons are buying a house that costs $210,000 and can afford a 20% down payment. If the Johnsons want the lowest monthly payment, which loan option would you recommend?

A
30 year FHA, 3.5% down at a fixed rate of 6.25%
B
30 year fixed, 20% down at a fixed rate of 6%
C
30 year fixed, 10% down at a fixed rate of 6%
D
15 year fixed, 20% down at a fixed rate 5.5%
3

Kaleb wants to get a payday loan in the amount of $375. He knows that the annual percentage rates (APR) for these types of loans are high, but he is hoping to find one that has an APR of 40%. If Kaleb finds a business that charges a fee of $37 for the loan, what would the term of the loan need to be in order for Kaleb to get his desired APR?

A
9 days
B
19 days
C
90 days
D
95 days
4

Tyrell bought a house for $186,500. He has a 30 year mortgage with a fixed rate of 6.5%. Tyrell’s monthly payments are $1,060.93. How much was Tyrell’s down payment?

A
$12,120
B
$18,650
C
$27,975
D
$37,300
5

Nick found his dream home that has a purchase price of $192,000. Nick earns $3,325 a month and wants to spend no more than 30% of his income on his mortgage payment. He has saved up $35,000 for a down payment. Nick is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%. What modification can be made to this loan to make it a viable option, given Nick’s situation?

A
Change to a 15 year fixed loan
B
Change the interest to 6%
C
Change the down payment to 18% down
D
None. This is a viable option for Nick.
6

Theresa is buying a condo that costs $127,500. She has $8,300 in savings and earns $3,200 a month. Theresa would like to spend no more than 20% of her income on her mortgage payment. Which loan option would you recommend to Theresa?

A
30 year fixed, 6.5% down at a fixed rate of 5%
B
30 year FHA, 3.5% down at a fixed rate of 6.5%
C
30 year fixed, 5% down at a fixed rate of 6.25%
D
30 year fixed, 10% down at a fixed rate of 5.75%
7

Verona goes to a business that offers tax refund anticipation loans because she really wants to get her money right now and not wait. They calculate her refund to be $985 and charge her $130 in fees for the loan. If the term on her loan is 15 days, what is the annual percentage rate on her loan?

A
130%
B
184%
C
317%
D
321%
8

Julio just bought a $267,900 house. He had a 20 year mortgage with a fixed rate of 5.875%. Julio’s monthly payments are $1,558.09. What percent of the purchase price was Julio’s down payment?

A
13%
B
15%
C
18%
D
20%
9

Jolene is graduating from high school in May. She received this offer from a university. Financial Analysis for UniversityCosts per YearFinancial Aid Package per YearTuition & FeesScholarships & Grants$9,800$11,000Room & BoardWork-Study$12,500$5,000Which statements about the offer are true? Check all that apply.

T
The total cost per year is $22,300.
S
She will need to repay $16,000 for each year of college.
F
Financial aid will cover $16,000 for each year of college with no need to repay.
F
Financial aid will cover $11,000 for each year of college with no need to repay.
S
She could use money from savings or parental contributions to pay the remaining $6,300 each year.
S
She could use a student loan to pay the remaining $6,300 each year.
10

Explain how the amount of a down payment affects your monthly mortgage payments.

Answer:

The more money you put down, the smaller your principal value becomes. Having a smaller principal value will make your monthly payments smaller.

11

1.

H
He should wait until his last year in high school to fill out the FAFSA.
H
He should start saving right away. It is never too early to start a savings account.
H
He should work hard throughout middle school and high school or it might be too difficult for him to excel later, since bad habits are hard to break.
H
He should try different sports and clubs in middle school and early high school. Then he should pick his favorites and invest more time in them.
W
While in high school, he should quit all extracurricular activities so he can work more hours and save money.
H
He should ask all his friends and neighbors to contribute to his college fund so it will grow faster.
12

A consumer charges a $46.92 purchase on a credit card. The card has a daily interest rate of 0.039%. If the consumer pays off the balance at the end of 30 days, how much in interest will be paid for the purchase?

A
$0.06
B
$0.18
C
$0.55
D
$5.49
13

A person’s credit score can range from a low of 300 to a high of what number?

Answer not available
14

Holly plans to attend community college next year. Her expenses are only $1,200 because her parents are paying the rest. Holly earned a $750 scholarship. How much will she need to pay from her savings?

$
$450
$
$750
$
$1,200
$
$1,950
15

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.

Did you find these answers helpful?

More from this Course

Quiz
15 verified answers

Unit Test

Quiz
1 verified answers

Unit Test

Assignment
15 verified answers

Assignment