Pretest

Question 1

A credit score is based in part on

Revolt · Accepted Answer

payment history and total debt.

Question 2

Which describes an example of using unsecured credit?

Revolt · Accepted Answer

Someone buys new gutters for a home with a credit card.

Question 3

Which statement is true of both mortgages and auto loans?

Revolt · Accepted Answer

They are secured loans and generally require a down payment.

Question 4

Which describes the difference between secured and unsecured credit?

Revolt · Accepted Answer

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

Question 5

The simple interest on a loan of $200 at 10 percent interest per year is

Revolt · Accepted Answer

$20 per year until the loan is paid off.

Question 6

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

Revolt · Accepted Answer

a market's condition

Question 7

An example of secured credit is a

Revolt · Accepted Answer

mortgage.

Question 8

What is the compound interest on a three-year, 100 point 0 0 dollars loan at a 10 percent annual interest rate?

Revolt · Accepted Answer

33 point 1 0 dollars

Question 9

Consumers who pay more than the minimum payment on credit cards

Revolt · Accepted Answer

pay less interest in the long run.

Question 10

Which describes the difference between simple and compound interest?

Revolt · Accepted Answer

Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued.

Pretest Answers