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| 1 | |
The amount financed is the cash price plus the down payment. |
| | A) | True |
| | B) | False |
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| 2 | |
The Truth in Lending Act makes certain the lender is aware of the true cost of credit. |
| | A) | True |
| | B) | False |
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| 3 | |
In the Rule of 78, the rebate amount is the rebate fraction time the total finance charge. |
| | A) | True |
| | B) | False |
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| 4 | |
Paying only the minimum down on a credit card makes the most financial sense. |
| | A) | True |
| | B) | False |
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| 5 | |
Finance charge and interest charge can mean the same. |
| | A) | True |
| | B) | False |
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| 6 | |
The APR table is based on: |
| | A) | $10 |
| | B) | $100 |
| | C) | $1000 |
| | D) | $10,000 |
| | E) | None of the above |
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| 7 | |
The Truth in Lending Act requires the APR to be stated with accuracy to the nearest: |
| | A) | Whole percent |
| | B) | ½ of 1 percent |
| | C) | ¾ of 1 percent |
| | D) | ¼ of 1 percent |
| | E) | None of the above |
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| 8 | |
The numerator of a rebate fraction represents the sum of digits based on: |
| | A) | Total number of months of loan |
| | B) | Number of months used up |
| | C) | Number of weeks of loan |
| | D) | Number of months to go |
| | E) | None of the above |
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| 9 | |
The Rule of 78: |
| | A) | Is never used today |
| | B) | Is always used today |
| | C) | Is used for loans of 61 months or longer |
| | D) | Are never used by the Federal Government |
| | E) | None of the above |
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| 10 | |
The finance charge on the average daily balance is the average daily balance: |
| | A) | Timse the down payment |
| | B) | Divided by the down payment |
| | C) | Times the finance rate per month |
| | D) | Plus th finance charge |
| | E) | None of the above |
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| 11 | |
The second step of the Rule of 78 is to: |
| | A) | Calculate the rebate fraction |
| | B) | Calculate the balance outstanding |
| | C) | Calculate the total finance charge |
| | D) | Find the number of payments remaining |
| | E) | None of the above |
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| 12 | |
Walter Lantz bought a used Mercedes for $40,000. Walter put a down payment of $6,000 and paid $599 monthly for 60 months. The total finance charge was: |
| | A) | $4,100 |
| | B) | $1,940 |
| | C) | $1,400 |
| | D) | $2,602 |
| | E) | None of the above |
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| 13 | |
Grace Stafford requested you to calculate the average daily balance on her credit card account for the month of May. Her previous balance was $600. On May 4 she made a payment of $200. On May 8 she filled-up her car for $55. On May 15 she returned an item for $95. On May 20 she purchased groceries for $110. |
| | A) | $470 |
| | B) | $452.42 |
| | C) | $14,025 |
| | D) | $600 |
| | E) | None of the above |
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| 14 | |
Murray Slater bought a new car for $25,000. He put down $7,000 and paid $320 for 60 months. The total finance charge to Murray is: |
| | A) | $1,200 |
| | B) | $5,800 |
| | C) | $2,100 |
| | D) | $8,500 |
| | E) | None of the above |
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| 15 | |
Carol Miller bought a new boat for $15,000. She put a $2,500 down payment on it. The bank's loan was for 60 months. Finance charges totaled $4,600. Her monthly payment is: |
| | A) | $258.00 |
| | B) | $280.33 |
| | C) | $285.00 |
| | D) | $208.33 |
| | E) | None of the above |
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