Which credit payback strategy would lead to the HIGHEST interest charges?

making the minimum payment every month with an occasional late payment

You have overdraft protection. What happens if you overdraft on your account?

Will be charged a fee for each transaction you go over

Why is it a good idea to pay more than your monthly loan amount?

The extra payment is applied to the principal, which pays down debt quicker

What is an effective strategy for personal saving?

Save a certain percentage each paycheck

You are considering buying a $30,000 car. Which financing options will likely lead to the LOWEST payment?

$3000 down payment, 6% interest, 84 months

Who does not have to file a tax return?

Someone with total income of $9,500 from three jobs

How can you access the money from your checking account?

Use debit card to pay for groceries at POS terminal

How does investing in the stock market differ from putting money in a savings account at a bank?

Investing helps to accumulate for retirement while saving is best form stg

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Personal Finance NGPF final exam review pt 2

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Questions 19

Answers

1
You live in an area where homes cost $550,000. You can afford a $300,000 mortgage. What down payment will you need?
$250,000
$0
$300,000
$200,000
2
Which credit payback strategy would lead to the HIGHEST interest charges?
paying 20% of credit card balance every month on time
making the minimum payment every month with an occasional late payment
paying your credit card bill in full every month
making the minimum payment every month on time
3
You have overdraft protection. What happens if you overdraft on your account?
Bank will give you 5 days to add funds to your account to cover overdrafts
Bank will not allow you to overdraft your account so card will be denied
Will be charged a fee for each transaction you go over
Account will be closed
4
When borrowing money it is better to have a _______ interest rate.
lower
higher
5
A _______ credit score indicates good credit and will lead to a ________ interest rate on a loan.
higher, lower
lower, higher
higher, higher
lower, lower
6
What is an advantage of paying your bills online?
Saves time and paper
Company you pay receives money same day
There is a small fee to set-up and use this feature
Eliminates late fees
7
Where does the money come from when you use your debit card?
Deducted from checking account
Credit card company gives a cash advance to cover the cost
Deducted from credit card account
Credit card company covers the cost
8
Why is it a good idea to pay more than your monthly loan amount?
Amortized loans have higher interest rates, so it's best place for extras.
Every time you pay extra, the lender reduces the interest rate
Extra payment is applied to the interest, which reduces overall cost
The extra payment is applied to the principal, which pays down debt quicker
9
What is an effective strategy for personal saving?
Wait until end of month and save whatever you have left in checking account
Take out a payday loan so you can save before getting your paycheck
Cover all needs and wants and save whatever is left over
Save a certain percentage each paycheck
10
You are considering buying a $30,000 car. Which financing options will likely lead to the LOWEST payment?
$0 down payment, 0% interest, 36 months
$3000 down payment, 6% interest, 84 months
$0 down payment, 6% interest, 60 months
$3000 down payment, 6% interest, 60 months
11
Which is a way NOT to file your taxes?
filing a paper copy
using tax software
using your stockbroker
using professional tax preparers
12
Which form determines how much money is withheld from your paycheck for federal and state income taxes?
I-9
1040
W-4
W-2
13
Who does not have to file a tax return?
Someone who owns a business and has an income of $7,000
Someone with total income of $9,500 from three jobs
Someone who earned $12,000 in wages and $250 in tips
Someone who earns $28,200 but paid in cash
14
This form is used to prove that you are eligible to work in the U.S.
1040
1099
W-4
I-9
15
The 50-20-30 rules states you should spend _____ on needs, _______ on savings, _______ on wants.
30,20,50
30,50,20
50,20,30
20,50,30
16
What will not help you build your credit history?
credit card
auto loan
secured credit card
debit card
17
Experts recommend that you accumulate enough to cover 3-6 __________ of expenses in your emergency fund.
months
years
days
weeks
18
How can you access the money from your checking account?
Deposit paycheck at an ATM
Taking cash out with credit card at an ATM
Receive P2P payment from a friend
Use debit card to pay for groceries at POS terminal
19
How does investing in the stock market differ from putting money in a savings account at a bank?
Investing helps to accumulate for retirement while saving is best form stg
Investing typically earns 1-2% while saving earns between 5-7%
Investing is best for short-term situations; savings is for long term
Investing is always a less risky option than saving

Personal Finance NGPF final exam review pt 2 Flashcards | StudBud