Question 1

The Truth in Lending Act requires that the APR be stated accurately to the nearest 1/4 of 1%.

Accepted Answer

A) True 
 B)False  True

Question 2

Earl Miller buys a new desk for $2,600. Miller will pay back $270 per month. Monthly interest is 5% on the unpaid balance. Calculate the balance outstanding after the second payment. (Use the U.S. Rule.)

Free

(Short Answer)

4.9/5

(73)

Question 2

Correct Answer:

Verified

$2,313

Accepted Answer

$2,313

Question 3

Mia Lane bought a high-definition television for $7,500. Based on her income, she could afford to pay back only $600 per month. There is 1 ½% monthly interest charge on the unpaid balance. The U.S. Rule is used in the calculation. At the end of month 1, the balance outstanding is:

Accepted Answer

A)  $6,012.50 
B)  $5,012.50 
C)  $4,012.50 
D)  $3,012.50 
E)  None of these 
A)  $6,012.50 
B)  $5,012.50 
C)  $4,012.50 
D)  $3,012.50 
E)  None of these E

Question 4

John Sullivan bought a new Brunswick boat for $17,000. He made a $2,500 down payment on it. The bank's loan was for 60 months. Finance charges totaled $4,900. His monthly payment is:

Accepted Answer

A)  $313.33 
B)  $323.33 
C)  $332.33 
D)  $232.33 
E)  None of these 
A)  $313.33 
B)  $323.33 
C)  $332.33 
D)  $232.33 
E)  None of these

Question 5

Marika Katz bought a $7,000 computer. Based on her income, Marika could afford to pay back only $700 per month. The charge on the unpaid balance is 1 1/2%. The U.S. Rule is used in the calculation. Calculate the balance outstanding after the second month.

Accepted Answer

The answer of Marika Katz bought a $7,000 computer. Based...

Question 6

Shelley purchased a home in Maryland Heights, MO, for $204,000. Her down payment was 20% of the cash price, and she obtained a mortgage for 20 years at 7%. What is Shelley's monthly payment and total finance charges?

Accepted Answer

N= 240 I/Y= .5833333

Question 7

Calculating APR requires that the total amount financed be divided by the interest charge and then multiplied by 100.

Accepted Answer

A) True 
 B)False

Question 8

Calculate the average daily balance (assume a 30-day billing cycle):

Accepted Answer

The answer of Calculate the average daily balance (assume a...

Question 9

Jane Ranch bought a tractor for $5,000. Jane has decided that she can afford to pay only $1,000 per month. Can you calculate at the end of month 2 the balance of the loan outstanding? Use the U.S. Rule. The monthly interest charged is 5% on the unpaid balance.

Accepted Answer

The answer of Jane Ranch bought a tractor for $5,000....

Question 10

Kerry has a $1,973 per month mortgage payment. He decides to refinance his $204,000 balance at 5% over 20 years. What is his new monthly payment?

Accepted Answer

N= 240 I/Y= .4166667

Question 11

Mary Jones just received the following statement. Can you help her calculate (A) the average daily balance and (B) the finance charge?
   Finance charge is 1½% of average daily balance.

Accepted Answer

A. $2,062.

Question 12

Which one of the following statements is incorrect?

Accepted Answer

A)  The Truth in Lending Act was passed in 1969 
B)  APR is the true effective annual interest charged by sellers 
C)  The Truth in Lending Act regulates interest charges 
D)  APR represents the true effective rate annual rate of interest 
E)  None of these 
A)  The Truth in Lending Act was passed in 1969 
B)  APR is the true effective annual interest charged by sellers 
C)  The Truth in Lending Act regulates interest charges 
D)  APR represents the true effective rate annual rate of interest 
E)  None of these

Question 13

Ed Sloan bought a new Explorer for $22,000. He put down $7,000 and paid $290 for 60 months. The total finance charge to Ed is:

Accepted Answer

A)  $15,000 
B)  $17,400 
C)  $2,400 
D)  $4,200 
E)  None of these 
A)  $15,000 
B)  $17,400 
C)  $2,400 
D)  $4,200 
E)  None of these

Question 14

Amortization is not a payment process.

Accepted Answer

A) True 
 B)False

Question 15

Jennifer Rick buys a new typewriter for $590. Jennifer puts 20% down and will pay $70 a month for the next 10 months. What is (A) the amount of the loan, (B) the total amount of monthly payments, and (C) the total of the finance charge?

Accepted Answer

A. $472; B. $700; C.

Question 16

Calculate APR:

Accepted Answer

The answer of Calculate APR:
  ...

Question 17

The Fair Credit and Charge Card Disclosure Act of 1988 is optional advice to credit card companies.

Accepted Answer

A) True 
 B)False

Question 18

Calculate (A) the average daily balance and (B) the finance charge.
Finance charge is 2% of average daily balance.

Accepted Answer

A. $929.31

Question 19

The U.S. Rule can be applied to open credit payments.

Accepted Answer

A) True 
 B)False

Question 20

Given: $140.10 per month; cash price $5,600; down payment $0; 60 payments Cash or trade months with bank-approved credit; amount financed $5,600
Finance charge $2,806
Total payments $8,406
The APR is:

Accepted Answer

A)  17.30% 
B)  17.00 % 
C)  16.75 % 
D)  16.50 % 
E)  None of these 
A)  17.30% 
B)  17.00 % 
C)  16.75 % 
D)  16.50 % 
E)  None of these

Exam 10: Installment Buying and Revolving Charge Credit Cards

The Truth in Lending Act requires that the APR be stated accurately to the nearest 1/4 of 1%.

Earl Miller buys a new desk for $2,600. Miller will pay back $270 per month. Monthly interest is 5% on the unpaid balance. Calculate the balance outstanding after the second payment. (Use the U.S. Rule.)

Mia Lane bought a high-definition television for $7,500. Based on her income, she could afford to pay back only $600 per month. There is 1 ½% monthly interest charge on the unpaid balance. The U.S. Rule is used in the calculation. At the end of month 1, the balance outstanding is:

John Sullivan bought a new Brunswick boat for $17,000. He made a $2,500 down payment on it. The bank's loan was for 60 months. Finance charges totaled $4,900. His monthly payment is:

Marika Katz bought a $7,000 computer. Based on her income, Marika could afford to pay back only $700 per month. The charge on the unpaid balance is 1 1/2%. The U.S. Rule is used in the calculation. Calculate the balance outstanding after the second month.

Shelley purchased a home in Maryland Heights, MO, for $204,000. Her down payment was 20% of the cash price, and she obtained a mortgage for 20 years at 7%. What is Shelley's monthly payment and total finance charges?

Calculating APR requires that the total amount financed be divided by the interest charge and then multiplied by 100.

Calculate the average daily balance (assume a 30-day billing cycle):

Jane Ranch bought a tractor for $5,000. Jane has decided that she can afford to pay only $1,000 per month. Can you calculate at the end of month 2 the balance of the loan outstanding? Use the U.S. Rule. The monthly interest charged is 5% on the unpaid balance.

Kerry has a $1,973 per month mortgage payment. He decides to refinance his $204,000 balance at 5% over 20 years. What is his new monthly payment?

Mary Jones just received the following statement. Can you help her calculate (A) the average daily balance and (B) the finance charge? Finance charge is 1½% of average daily balance.

Which one of the following statements is incorrect?

Ed Sloan bought a new Explorer for $22,000. He put down $7,000 and paid $290 for 60 months. The total finance charge to Ed is:

Amortization is not a payment process.

Jennifer Rick buys a new typewriter for $590. Jennifer puts 20% down and will pay $70 a month for the next 10 months. What is (A) the amount of the loan, (B) the total amount of monthly payments, and (C) the total of the finance charge?

Calculate APR:

The Fair Credit and Charge Card Disclosure Act of 1988 is optional advice to credit card companies.

Calculate (A) the average daily balance and (B) the finance charge. Finance charge is 2% of average daily balance.

The U.S. Rule can be applied to open credit payments.

Given: $140.10 per month; cash price $5,600; down payment $0; 60 payments Cash or trade months with bank-approved credit; amount financed $5,600 Finance charge $2,806 Total payments $8,406 The APR is:

Problem Solving With Math

Fractions

Decimals

Solving for the Unknown

Business Statistics

Banking and Budgeting

Payroll and Income Tax

Sales, Excise, and Property Taxes

Risk Management

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

The Cost of Home Ownership

Compound Interest and Present Value

Annuities and Sinking Funds

Stocks, Bonds, and Mutual Funds

Filters