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| 1 | |
Amortization is not a payment process. |
| | A) | True |
| | B) | False |
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| 2 | |
The Truth in Lending Act regulates interest charges. |
| | A) | True |
| | B) | False |
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| 3 | |
The monthly payment is calculated by totaling the finance charge and amount financed divided by the number of payments of the loan. |
| | A) | True |
| | B) | False |
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| 4 | |
Revolving charge accounts must be completely paid off by end of the month. |
| | A) | True |
| | B) | False |
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| 5 | |
The daily balance is the previous balance plus cash advances plus purchases less any payments. |
| | A) | True |
| | B) | False |
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| 6 | |
The finance charge is equal to the total of all monthly payments: |
| | A) | Plus amount financed |
| | B) | Less amount financed |
| | C) | Divided by amount financed |
| | D) | Multiplied by amount financed |
| | E) | None of the above |
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| 7 | |
The APR represents the: |
| | A) | Stated rate of interest |
| | B) | True effective quarterly interest rate charged by seller |
| | C) | True effective annual rate of interest charged by buyer |
| | D) | True effective annual rate of interest charged by seller |
| | E) | None of the above |
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| 8 | |
The denominator of a rebate fraction represents the sum of digits based on: |
| | A) | Number of months to go |
| | B) | Number of months used up |
| | C) | Number of weeks of loan |
| | D) | Total number of months of loan |
| | E) | None of the above |
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| 9 | |
The rebate and payoff of a loan before the due date is based on the: |
| | A) | Rules of 34 |
| | B) | Rules of 65 |
| | C) | Rules of 87 |
| | D) | Rules of 92 |
| | E) | None of the above |
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| 10 | |
Most companies calculate the finance charge on credit card accounts as a percentage of the: |
| | A) | Daily balance |
| | B) | Weekly balance |
| | C) | Average daily balance |
| | D) | Average weekly balance |
| | E) | None of the above |
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| 11 | |
The average daily balance is equal to the sum of daily balances: |
| | A) | Plus number of days in billing cycle |
| | B) | Less number of days in billing cycle |
| | C) | Divided by number of days in billing cycle |
| | D) | Multiplied by number of days in billing cycle |
| | E) | None of the above |
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| 12 | |
Al Ree bought a new delivery truck for $18,000. Al put a down payment of $4,000 and paid $270 monthly for 60 months. The total finance charge was: |
| | A) | $2,000 |
| | B) | $2,200 |
| | C) | $2,020 |
| | D) | $4,000 |
| | E) | None of the above |
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| 13 | |
Brad James bought a desk for $12,000. Based on his income, he could only afford to pay back $1,000 per month. There is 1½ percent monthly interest charge on the unpaid balance. The U.S. Rule is used in the calculation. At the end of month one the balance outstanding is: |
| | A) | $11,000 |
| | B) | $11,180 |
| | C) | $11,015 |
| | D) | $11,150 |
| | E) | None of the above |
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| 14 | |
Ruth Sloan bought a new car for $20,000. She put down $6,000 and paid $280 for 60 months. The total finance charge to Ruth is: |
| | A) | $2,800 |
| | B) | $3,200 |
| | C) | $2,850 |
| | D) | $3,250 |
| | E) | None of the above |
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| 15 | |
Jackie Flynn bought a new boat for $16,000. She put a $3,000 down payment on it. The bank's loan was for 60 months. Finance charges totaled $4,800. Her monthly payment is: |
| | A) | $346.67 |
| | B) | $364.76 |
| | C) | $296.67 |
| | D) | $269.67 |
| | E) | None of the above |
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