Question 1

You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the:

Accepted Answer

A)  add-on method. 
B)  double declining balance method. 
C)  discount method. 
D)  simple interest method. 
E)  past-due balance method. 
A)  add-on method. 
B)  double declining balance method. 
C)  discount method. 
D)  simple interest method. 
E)  past-due balance method.

Question 2

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.
-Borrowers are more likely to ask for a(n) [single payment | installment payment] consumer loan.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 3

The best loan rates for consumer loans are from consumer finance companies.

Accepted Answer

A) True 
 B)False

Question 4

About one in four student loans are past due.

Accepted Answer

A) True 
 B)False

Question 5

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.
-Your budget should be considered [before | after] taking on a large consumer loan.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 6

The most common use of consumer loans is to purchase automobiles .

Accepted Answer

A) True 
 B)False

Question 7

Single-payment loans are used mostly for short-term financing.

Accepted Answer

A) True 
 B)False

Question 8

A _____ is often a source of automobile financing on specific models of vehicles.

Accepted Answer

A)  savings and loan association 
B)  credit union 
C)  commercial bank 
D)  consumer finance company 
E)  captive finance company 
A)  savings and loan association 
B)  credit union 
C)  commercial bank 
D)  consumer finance company 
E)  captive finance company

Question 9

When the market interest rate goes up,the rate on variable rate loans goes up.

Accepted Answer

A) True 
 B)False

Question 10

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.
-There are now about [$1 billion | $1 trillion] in student loans outstanding.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

Jamie is going to buy some furniture with a single-payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.

Accepted Answer

Finance charge = $5,000 × .10

Question 12

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 longer the loan maturity,the [lower | higher] the monthly payments will be.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 13

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 majority of single-payment loans [are | are not] secured by collateral.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 14

Consolidation loans are often used to help borrowers straighten out a critical financial situation.

Accepted Answer

A) True 
 B)False

Question 15

Credit unions grant loans only to members of the credit union.

Accepted Answer

A) True 
 B)False

Question 16

Consumers whose debt burden has become very heavy might apply for a(n):

Accepted Answer

A)  personal loan. 
B)  single-payment loan. 
C)  buy-down loan. 
D)  consolidation loan. 
E)  interim financing. 
A)  personal loan. 
B)  single-payment loan. 
C)  buy-down loan. 
D)  consolidation loan. 
E)  interim financing.

Question 17

Regarding student loans,which of the following is true?

Accepted Answer

A)  They are available only for undergraduate. 
B)  Parents (or legal guardians)must cosign. 
C)  There is a limit on how much can be borrowed. 
D)  They have to take loan only from one of the government programs. 
E)  Interest does not have to be paid. 
A)  They are available only for undergraduate. 
B)  Parents (or legal guardians)must cosign. 
C)  There is a limit on how much can be borrowed. 
D)  They have to take loan only from one of the government programs. 
E)  Interest does not have to be paid.

Question 18

The average undergraduate student loan for students graduating in 2014 is estimated to be over:

Accepted Answer

A)  $15,200 
B)  $40,600 
C)  $33,000 
D)  $18,400 
E)  $26,300 
A)  $15,200 
B)  $40,600 
C)  $33,000 
D)  $18,400 
E)  $26,300

Question 19

Consumer loans are most commonly used to obtain durable goods.

Accepted Answer

A) True 
 B)False

Question 20

Both single-payment and installment loans can have variable interest rates.

Accepted Answer

A) True 
 B)False

You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the:

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. -Borrowers are more likely to ask for a(n) [single payment | installment payment] consumer loan.

The best loan rates for consumer loans are from consumer finance companies.

About one in four student loans are past due.

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. -Your budget should be considered [before | after] taking on a large consumer loan.

The most common use of consumer loans is to purchase automobiles .

Single-payment loans are used mostly for short-term financing.

A _____ is often a source of automobile financing on specific models of vehicles.

When the market interest rate goes up,the rate on variable rate loans goes up.

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. -There are now about [$1 billion | $1 trillion] in student loans outstanding.

Jamie is going to buy some furniture with a single-payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.

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 longer the loan maturity,the [lower | higher] the monthly payments will be.

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 majority of single-payment loans [are | are not] secured by collateral.

Consolidation loans are often used to help borrowers straighten out a critical financial situation.

Credit unions grant loans only to members of the credit union.

Consumers whose debt burden has become very heavy might apply for a(n):

Regarding student loans,which of the following is true?

The average undergraduate student loan for students graduating in 2014 is estimated to be over:

Consumer loans are most commonly used to obtain durable goods.

Both single-payment and installment loans can have variable interest rates.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 7: Using Consumer Loans

You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the:

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. -Borrowers are more likely to ask for a(n) [single payment | installment payment] consumer loan.

The best loan rates for consumer loans are from consumer finance companies.

About one in four student loans are past due.

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. -Your budget should be considered [before | after] taking on a large consumer loan.

The most common use of consumer loans is to purchase automobiles .

Single-payment loans are used mostly for short-term financing.

A _____ is often a source of automobile financing on specific models of vehicles.

When the market interest rate goes up,the rate on variable rate loans goes up.

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. -There are now about [$1 billion | $1 trillion] in student loans outstanding.

Jamie is going to buy some furniture with a single-payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.

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 longer the loan maturity,the [lower | higher] the monthly payments will be.

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 majority of single-payment loans [are | are not] secured by collateral.

Consolidation loans are often used to help borrowers straighten out a critical financial situation.

Credit unions grant loans only to members of the credit union.

Consumers whose debt burden has become very heavy might apply for a(n):

Regarding student loans,which of the following is true?

The average undergraduate student loan for students graduating in 2014 is estimated to be over:

Consumer loans are most commonly used to obtain durable goods.

Both single-payment and installment loans can have variable interest rates.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters