Answers WINGS PA - 26 Economics SmithCredit and Loans

Credit and Loans Answers

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What best determines whether a borrower’s interest rate on an adjustable rate loan goes up or down?

a fixed interest rate

a bank's finances

a market's condition

a person's finances

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good credita bank accounttax returns

good credit

a bank account

tax returns

Which describes the difference between secured and unsecured credit?

Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object.

Unsecured credit is backed by an asset equal to the value of a loan, while secured credit is not guaranteed by a material object.

Secured credit is risky because banks cannot seize assets, while unsecured credit is less risky because it is backed by material objects.

Unsecured credit enables lenders to seize an asset if a loan is not paid, while secured credit prohibits lenders from taking material objects.

What is a benefit of obtaining a personal loan?

getting money with special repayment terms

getting money with favorable interest rates

getting small amounts of money to use immediately

getting large amounts of money to use immediately

Consumers who pay more than the minimum payment on credit cards

pay less interest in the long run.

are able to buy more things.

see their credit scores decrease.

qualify for mortgages.

Read the scenario.Jay and Laura have been dreaming of purchasing their first home together. They've been diligently saving and have managed to accumulate a significant sum for a down payment.How does their decision to make a larger down payment benefit their financial situation as they purchase a home?

It increases the interest rate on the loan.

It decreases their credit score.

It increases the home’s value.

It decreases their monthly payment.

A credit score is based in part on

employment and race.

income and location.

employment and trust.

payment history and total debt.

Which statement is true of both mortgages and auto loans?

They are riskier than student loans for lenders.

They do not require a minimum payment.

They are secured loans and generally require a down payment.

They have higher interest rates than credit cards.

Which best describes a way people can use personal loans?

to buy a house

to buy a car

to pay for college

to pay for groceries

What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?

$10.00

$21.00

$33.10

$46.41

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