AnswersPersonal Finance - EL3403Mortgages and Home Ownership

Mortgages and Home Ownership — Unit test Answers

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1
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Borrowers taking a balloon payment mortgage most likely

A
plan to rent out their homes.
B
must repay the loan in five to ten years.
C
are unwilling to accept any risk in borrowing money.
D
remain in their homes for 30 years or more.
2
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The image shows a sales receipt.

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A
6.25 percent
B
8.5 percent
C
10 percent
D
10.85 percent
3

Yasmine plans to attend a four-year public university. She expects she will need to contribute $9,000 annually to her education. Which savings plan will help Yasmine save enough money to pay for one year of school, regardless of whether or not interest is earned on her savings?

A
$600 per month for 1 year
B
$350 per month for 2 years
C
$225 per month for 3 years
D
$200 per month for 4 years
4

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.
B
a higher principal.
C
a higher monthly payment.
D
a higher number of payments.
5

Interest on an investment is considered

A
financing.
B
a fee.
C
a penalty.
D
profit
6

Which describes a type of tax that people pay on money they earn?

A
flat tax
B
income tax
C
purchase tax
D
progressive tax
7

Which factors positively affect lifetime income? Check all that apply.

A
post-secondary education
B
employee benefits
C
salary
D
vocational training throughout career
E
high cost of living
F
early retirement
8

When the economy grows, the market grows, most likely because

A
more investors are willing to take risks.
B
the government has decreased spending.
C
the government has increased taxation.
D
investors have a greater desire for profits.
9

Richard’s annual college expenses are expected to total $17,745. He will receive $5,320 in grants. How much will Richard need to contribute to his annual college expenses?

A
$11,425
B
$11,465
C
$12,425
D
$12,465
10

A mortgage is a legal agreement between a borrower and a

A
city agency.
B
family court judge.
C
wealthy relative.
D
bank.
11

This year, the annual tuition at a public four-year university is $5,290. Next year when Jarrod attends his first year, the tuition is expected to increase 4.5%. Jarrod has 1 year to save the amount of money equal to the tuition for his first year. What is the approximate minimum amount Jarrod should save monthly?

A
$441
B
$461
C
$553
D
$639

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