Exam 5: Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Cassie received an $8,000 loan from the bank.The manager set up a 10% loan using the simple interest formula for one-year,but two payments.What are her total payments for the loan?

Paul borrowed $200 to be repaid in one year.He paid 10% interest and a service charge of $3.00.What is his finance charge?

Installment sales credit is a loan that allows a consumer to purchase high-priced items such as large appliances or furniture.

Rachel Johnson went to the ATM to withdraw $200 cash with her debit card.She inadvertently pulled out her credit card instead,not realizing the expenses for cash advances.If her credit card company charges a cash advance fee of 4% and interest at 22% APR,what are the total fees she will pay for her mistake?

Which of the following can result from a failure to repay a loan?

All of the following are signs of financial trouble except

Which of the following electronically subtracts money from your savings or checking account to pay for goods and services?

If you want to file a complaint against a bank,you

Define three of the following: a.Finance charge b.Annual percentage rate c.Simple interest d.Minimum monthly payment e.Add-on interest method

Economists recognize consumer credit as a major force in the American economy.

Credit reports can be obtained for all of the following reasons except

A credit card holder who pays off his balances in full each month is known as

The add-on interest calculation uses this formula: Interest = Principal × Rate of interest × Time.

Home equity loans

FICO and VantageScore are two methods used to judge creditworthiness.

A trade-off of credit is that it increases the amount of money that will be available to spend in the future.

Which of the following items should be shredded to protect yourself from identity theft?

Which of the following is the only online source authorized to provide a free credit report each year at your request?

Rich received a $5,000 loan from the bank.The manager set up a 6% loan using the simple interest formula for one year,but with two payments.What is the interest for his second payment?

Contrast a credit card with a debit card.