Consumer Responsibilities — Unit test Answers

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Giselle wants to buy a condo that has a purchase price of $163,000. Giselle earns $2,986 a month and wants to spend no more than 25% of her income on her mortgage payment. She has saved up $33,000 for a down payment. Giselle is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%. What modification can be made to this loan to make it a viable option, given Giselle’s situation? a. Change to a 15 year fixed loan b. Change the interest to 5.5% c. Change the down payment to 18% down d. None. This is a viable option for Giselle. Please select the best answer from the choices provided

A
A
B
B
C
C
D
D
2
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Peter wants to buy a duplex with a purchase price of $226,950. Peter can afford a 10% down payment. Peter earns $2,985 a month and wants to spend no more than 10% of his income on his mortgage payment. Peter is going to rent out the other half of the duplex. He thinks that if he charges $900 a month in rent this will cover the remainder of his mortgage payment. Given that Peter has a 30 year mortgage with a fixed rate of 6.25%, how should Peter adjust how much he charges for rent of the other half of the duplex?a.Peter should increase the rent by $200.b.Peter should increase the rent by $60.c.Peter should increase the rent by $10.d.Peter should keep the rent at $900.

A
A
B
B
C
C
D
D
3

Looking for some furniture for her new apartment, Susan visits the local swap meet in search of something cheap. Knowing that most swap meet vendors will not accept credit cards and that she will not have any money until her next payday, Susan decides to take out a $200 cash advance on her credit card at an interest rate of 32%.If Susan had no previous balance on her credit card, and she manages to pay off the balance within 1 month, how much will she have to pay in interest?a.$5.33b.$32.00c.$173.33d.$205.33

A
A
B
B
C
C
D
D
4

A consumer charges a $2,530.16 purchase on a credit card. The card has a daily interest rate of 0.042%. If the balance is paid off at the end of 30 days, how much interest will the consumer pay?

A
$0.32
B
$3.19
C
$31.88
D
$318.78
5

Feeling overwhelmed with monthly bills, Lin got a second job to help pay her debt but has had difficulty writing a budget and still falls short each month. She currently rents her home, and she has credit card bills, student loans, and a car payment.What step should Lin take next?

A
Lin should take out a personal loan in order to pay her monthly expenses.
B
Lin should contact an attorney to discuss the possibility of filing for bankruptcy.
C
Lin should take the means test to see if she qualifies for Chapter 13 bankruptcy.
D
Lin should contact a credit counselor to create a workable debt management plan.
6

How can you keep credit utilization low as you repair your credit score after bankruptcy?

A
Open several low-limit credit cards that require lower monthly payments.
B
Spend excess cash instead of charging the purchases to your credit cards.
C
Create a working budget that allows you to live within your means and save.
D
Increase credit card limits to have funds available if needed in an emergency.
7

Shaquil needs to borrow $400. The loan company charges him $80 in fees for the loan. Shaquil calculates that the annual percentage rate (APR) on his loan is 250%. Approximately what is the term of Shaquil’s loan?

A
7 days
B
29 days
C
46 days
D
73 days
8

What is the purpose of a credit score?

A
Your credit score is the result of conducting the means test evaluation.
B
Your credit score helps to determine if you qualify for Chapter 7 bankruptcy.
C
Your credit score tells lenders how likely you are to make payments on time.
D
Your credit score is the number of loans and credit cards in your credit history.
9

Haven follows a budget, pays her bills on time, and has a small balance in her savings. She was recently let go from her job. She has some medical procedures scheduled and bills which will be due soon. She finds herself stressing about her financial situation.What are some of her options?

A
She should max out her credit cards while looking for employment.
B
She should cancel her medical treatment while looking for employment.
C
She should seek advice from a credit counselor while looking for employment.
D
She should seek advice from a credit counselor and cancel her medical treatment.
10

The Ruiz family filed for Chapter 13 bankruptcy. Mr. Ruiz is employed and makes just enough money to pay the family’s living expenses. Mrs. Ruiz found a part-time job on the weekends. They have three minor children living at home.What impact will this family face after filing for bankruptcy?

A
Mrs. Ruiz's part-time job will cause the bankruptcy filing to be voided.
B
Mr. and Mrs. Ruiz might face difficulties in getting new credit or loans.
C
The Ruiz family will be legally prevented from seeking new employment.
D
Bankruptcy will immediately erase the family's pre-existing credit history.
11

The table shows a schedule of Inga’s payment plan for a car. Inga’s Payment Plan for the First 3 YearsYearBalanceMonthly PaymentEnd of YearBalance1$19,691.28$273.49$16,409.402$16,409.40$273.49$13,127.523$13,127.52$273.49$9,845.64 How many more years will it take Inga to pay off the loan?

A
2 years.
B
3 years
C
4 years
D
6 years
12

How can an individual determine the appropriate time to declare bankruptcy?

A
when attempts to adhere to a budget plan are unsuccessful
B
when overwhelmed by expenses and unable to manage finances
C
when all alternatives are exhausted, but debts remain unaffordable
D
when pay from overtime fails to cover the cost of monthly expenses
13

good credita bank accounttax returns

A
good credit
B
a bank account
C
tax returns
14

While out shopping, Lebron sees a sign for print tees advertised at 3 for $35 or $15 each. Lebron decides to buy 2 print tees. If the sales tax is 8%, how much more would Lebron have had to pay if he would have purchased 3 print tees?

A
$2.60
B
$4.60
C
$5.00
D
$5.40
15

Roderick is in 11th grade and wants to attend college to become a marine biologist. He knows he will need funds. What should he do to begin the process of planning for paying for his education?

A
He could ask his friends to donate to an account for his college fees.
B
He could fill out a FAFSA form to determine what financial aid he would qualify for.
C
He could quit the sports and clubs he is involved in to earn more money at an after-school job.
D
He could graduate from high school and then work until he has enough money to pay for college.
16

Which of the following statements is true?a.A 30 year fixed mortgage will always result in the lowest payment.b.You must have at least a 20% down payment to get a competitive interest rate.c.The lower your interest rate is, the lower your monthly payments are.d.The faster you pay off your mortgage, the lower your monthly payments are.

A
A
B
B
C
C
D
D
17

Which of the following statements is not true of cash advances? a. Credit card companies offer easy access to cash through ATM’s or checks that can be written to yourself and cashed. b. Credit card companies apply payments to cash advance balances first because the interest is higher. c. The APR of a cash advance is higher than that of regular credit card purchases. d. Credit card companies place limits on the amount of cash you can receive through a cash advance. Please select the best answer from the choices provided

A
A
B
B
C
C
D
D
18

An example of secured credit is a

A
payday loan.
B
credit card.
C
mortgage.
D
medical bill.
19

Mo has a credit card that gives a 3% discount on every purchase. The annual percentage rate on the card is 12%. He is purchasing an electronic reader for $140. Check all that apply.

A
If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $140.
B
If Mo pays cash, the cost of the purchase will be $140.
C
If Mo uses the credit card and pays off the balance at $30 a month for 7 months with no late fees, the cost of the purchase will be $143.34.
D
If Mo pays cash, the cost of the purchase will be $135.80.
E
If Mo uses the credit card and pays off the balance at $20 a month for 7 months with no late fees, the cost of the purchase will be $139.89.
F
If Mo uses the credit card and pays the full balance during the billing cycle, the cost of the purchase will be $135.80.
20

What are important strategies as someone works to repair their credit history?

A
Keep credit utilization low and attempt to make on-time payments.
B
Keep credit utilization low and monitor your credit score and reports.
C
Cancel credit card accounts and attempt to make on-time payments.
D
Cancel credit card accounts and monitor your credit score and reports.

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