Exam 5: Making Automobile and Housing Decisions

Kurt has $4,500 for a down payment and thinks she can afford monthly payments of $300.If he can finance a vehicle with a 7%,4-year loan,what is the maximum amount Kurt can afford to spend on the car?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The purchase price of the house you are buying is $140,000.A loan-to-value ratio of 80% will require a down payment of [$34,000 | $28,000].

An inflation hedge is an asset that increases in value at a rate equal to or greater than the rate of inflation.

When you receive title to an individual unit and joint ownership of any common areas and facilities,you have purchased

Which of the following are reasons people lease vehicles?

Condominium and single-family home owners can deduct real estate taxes and mortgage interest on their federal income taxes but co-op owners cannot take these deductions.

Felipe and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

A PITI payment is composed of principal,interest,property taxes,and homeowner's insurance.

The greatest fixed cost involved with owning an automobile is usually the auto insurance payments.

The largest single investment you will undertake in your lifetime will probably be the purchase of a house.

Terminating a car lease before expiration is often difficult and costly.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The biggest fixed cost of owning a car is [the loan payment | insurance].

Private mortgage insurance (PMI)protects the lender from loss on a loan.

One who leases an automobile is typically responsible for early termination costs,even when early termination is due to theft or an auto accident.

Advantages of buying a used car rather than a new car include

If a buyer withdraws from a transaction without a valid reason after signing a sales contract,he typically loses his earnest money.

The interest rate is likely to be lower on a 6-year auto loan than on a 3-year auto loan

A financial advantage of renting compared to purchasing housing is

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -In the same geographic area,the cost of a [ stand-alone home | condo] will usually be lower.

____ can be deducted on your federal tax return.