Financial Responsibility Answers

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Veronique and Lily each bought a piece of luggage that had the same price in different stores. The table below shows how they will pay for the item. Payment for PurchasesNamePayment TypePayment Amount (Including Finance Charges)Number of Months to Pay for ItemVeroniqueStore financed$2510LilyCredit card$357Who made the better financial decision and why?

A
Veronique because her payments are lower.
B
Veronique because her final cost, including finance charges, is less than Lily’s.
C
Lily because she is paying off her purchase sooner.
D
Lily because her final cost, including finance charges, is less than Veronique’s.
3

What might you expect to find out about people who are described as credit risks?

A
They are usually given a low interest rate.
B
They have a history of not making their payments on time.
C
They find it easy to get a loan from the bank.
D
They have a history of paying in full each month.
4

Omar is having trouble paying his rent and making minimum payments on his student loan and credit cards. What should Omar consider doing to improve his situation?

A
Omar should apply for a personal loan.
B
Omar should get budgeting advice from a consumer credit counselor.
C
Omar should apply for another credit card to buy food with.
D
Omar should make less than the minimum payments each month.
5

Which statement describes a disadvantage of Marnie paying a bill by telephone with a credit card or a debit card?

A
Marnie will not have to find a stamp and a mailbox.
B
Marnie will have to share her card account information.
C
Marnie’s bill is paid immediately.
D
Marnie may be eligible for a discount.
6

Which is a long-term consequence of making late payments on your bills?

A
It will be harder to secure a new loan at a low rate.
B
The balance in your checking account will be negative.
C
There will be a late fee.
D
The number of payments will increase.
7

Which payment option provides consistency in on-time bill payment?

A
mailing a check
B
making a payment by telephone
C
submitting an online payment
D
automatic withdrawal
8

Which person made the best payment decision for their preferences?

A
Sean decides to pay his bills online because he does not like the inconvenience of finding stamps and mailing his bills.
B
Maria decides to pay her bills by mailing a check because she wants the payment to be credited in the shortest amount of time.
C
Jonah decides to pay his bill by telephone because he wants to protect his account information.
D
Shawna decides to set up automatic withdrawals to pay her bills because she does not want to have to remember to keep enough money in her checking account.
9

Which is a possible benefit of having a good credit history?

A
getting a high interest rate on a credit card offer
B
obtaining a low interest rate on a loan
C
obtaining a savings account
D
having a paycheck garnished
10

Jaina and Tomas are being considered as new tenants in an apartment. The landlord looks at their creditworthiness because he wants to be sure his new tenant pays the rent on time and in full. The table below summarizes the information that was on their applications.Application informationQuestionsJainaTomasHow many years have you had your job?52What is your monthly salary?$1,850$2,500How many credit cards do you have?41How much debt do you have?$13,000$7,000How many times were you late with payments on credit cards in the past year?51Who will the landlord decide to be more creditworthy and why?

A
Tomas because the ratio of his debt to income is less.
B
Jaina because she has had her job longer, which makes her look more stable.
C
Jaina because she has more credit cards available to her.
D
Tomas because he makes more money per month.

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