AnswersAZ-College Prep Math BInvesting

Investing — Unit test Answers

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1
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Which financing option has the highest overall costs?

A
rent to own
B
credit card
C
installment
D
cash
2
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The advertisement demonstrates a popular way companies try to sell a product.

Question illustration
A
It includes shipping and handling costs.
B
It takes into account maintenance costs.
C
It explains why this price is a good deal.
D
It makes the full cost appears lower than it is.
3

marginalcomparisonemotionalresearch

A
marginal
B
comparison
C
emotional
D
research
4

The Hendersons are hosting a barbecue for five people and want to purchase enough chicken for everyone to have two pieces. Which option makes the most financial sense?

A
10 individual chicken breasts at $3 each
B
5 two-packs of chicken breasts at $5 each
C
a 12-pack bag of chicken at $20
D
a 20-pack bag of chicken at $35
5

Which of these is a characteristic of certificates of deposit (CDs)?

A
They are always offered at variable rates.
B
They last for a set period of time.
C
They can be opened with any amount of money.
D
They allow access to the money at any time without penalty.
6

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?

A
It increases the interest rate on the loan.
B
It decreases their credit score.
C
It increases the home’s value.
D
It decreases their monthly payment.
7

Which example could be considered a harmful spending motivation?

A
asking others about potential hidden costs
B
putting family needs first before buying a product
C
buying something expensive in order to feel better
D
comparing features of many different products
8

Which statement is true of both mortgages and auto loans?

A
They are riskier than student loans for lenders.
B
They do not require a minimum payment.
C
They are secured loans and generally require a down payment.
D
They have higher interest rates than credit cards.
9

Uta invests an amount into a compound interest investment account that pays 6% a year. After six years, she withdraws her total balance of $500. Using the formula , how much money did Uta initially invest?

Question illustration
A
$180.00
B
$320.00
C
$352.48
D
$471.70
10

The chart shows pricing and payment options for three big items.

Question illustration
A
paying the $1,450 up front
B
making rent-to-own payments
C
taking out an installment plan
D
renting to own and returning the item mid-contract
11

For which buyer would a lender most likely approve a $200,000 mortgage?

A
a person with a credit score of 800 with a large amount of debt who has recently switched to a lower-paying job
B
a person with a credit score of 760 with a small amount of debt who has had steady employment for many years
C
a person with a credit score of 650 with a large amount of available credit who has a low-paying, but steady job
D
a person with a credit score of 600 with a small amount of available credit who has recently switched to a high-paying job
12

Consumers usually save the most money on major purchases when they

A
agree to an installment plan.
B
save up to pay with cash.
C
take out a low-interest loan.
D
agree to rent to own.
13

Sharla invests $275 in a simple interest bearing account for 16 years. The annual interest rate is 8%. Using the simple interest formula, , how much interest will Sharla’s initial investment earn over the 16 year period?

Question illustration
A
$297
B
$319
C
$352
D
$627
14

Glenn and Maggie own a regional chain of juice bars and are looking to expand in the coming year. They already have fifty shops, but they know they will need a loan to reach their goal of one hundred twenty five shops. Which type of banking institution is most suitable for Glenn and Maggie’s business?

A
a credit union
B
a savings and loan
C
a commercial bank
D
an investment bank
15

An initial amount of $800 is invested in a compound savings account with an annual interest rate of 4.5%. Using the formula , what is the balance after five years?

Question illustration
A
$836.00
B
$873.62
C
$980.00
D
$996.95
16

The type of credit people are most likely to use for small purchases during their lifetime is

A
a credit card.
B
a personal loan.
C
an auto loan.
D
a mortgage.
17

Samantha has $200 to spend on school clothes. She can buy two designer blouses that all of her friends have, or she can buy four generic blouses for the same amount. She decides to buy the designer blouses.What is Samantha’s motivation behind buying the designer blouses?

A
conspicuous consumption
B
consideration for the future
C
confusion of needs and wants
D
desire to get the best deal
18

The graphic compares two basketball shoes.

Question illustration
A
the Hyper-Dunks because they will last for two seasons
B
the Air Slammers because they are the best price
C
the Hyper-Dunks because his favorite pro player wears them
D
the Air Slammers because those are what his teammates chose
19

What helps a consumer determine the quantity of something to buy?

A
marginal cost
B
marginal error
C
marginal benefit
D
marginal comparison
20

How do short-term financial goals differ from long-term financial goals?

A
Short-term goals involve more planning than long-term goals.
B
Short-term goals are more affordable than long-term goals.
C
Short-term goals cost more than long-term goals in the long run.
D
Short-term goals are more immediate than long-term goals.

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