# Quiz 14: Installment Buying

Business

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True False

False

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True False

True

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True False

False

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True False

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True False

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True False

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True False

Q 8Q 8

Calculating APR by table lookup requires that the total amount financed be divided by the interest charge and then multiplied by 100.

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True False

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True False

Q 10Q 10

The monthly payment is calculated by totaling the finance charge and amount financed and dividing that by the number of payments of the loan.

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True False

Q 11Q 11

The Fair Credit and Charge Card Disclosure Act of 1988 is optional advice to credit card companies.

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True False

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True False

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True False

Q 14Q 14

Today most companies calculate the finance charge on their credit card accounts as a percentage of the yearly balance.

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True False

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True False

Q 16Q 16

The daily balance is the previous balance plus cash advances plus purchases minus any payments.

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True False

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True False

Q 18Q 18

Average daily balance is equal to sum of daily balances divided by number of days in the billing cycle.

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True False

Q 19Q 19

Amount financed is equal to:
A)Cash price times down payment
B)Cash price plus down payment
C)Cash price minus down payment
D)Cash price divided by down payment
E)None of these

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Multiple Choice

Q 20Q 20

The finance charge is equal to the total of all monthly payments:
A)Plus amount financed
B)Minus amount financed
C)Divided by amount financed
D)Multiplied by amount financed
E)None of these

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Multiple Choice

Q 21Q 21

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 these

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Multiple Choice

Q 22Q 22

Which one of the following statements is incorrect?
A)The Truth in Lending Act was passed in 1969
B)APR is the true effective annual interest charged by sellers
C)The Truth in Lending Act regulates interest charges
D)APR represents the true effective rate annual rate of interest
E)None of these

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Multiple Choice

Q 23Q 23

Open credit in a revolving charge plan results in:
A)One purchase per month
B)The U.S. Rule being applied to each purchase
C)As many cash purchases till credit limit is reached
D)As many charged purchases till credit limit is reached
E)None of these

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Multiple Choice

Q 24Q 24

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 these

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Multiple Choice

Q 25Q 25

In calculating the daily balance, cash advances are:
A)Added in
B)Subtracted out
C)Sometimes added in
D)Sometimes subtracted out
E)None of these

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Multiple Choice

Q 26Q 26

The average daily balance is equal to the sum of daily balances:
A)Plus number of days in billing cycle
B)Minus 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 these

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Multiple Choice

Q 27Q 27

Dan Miller bought a new Toyota truck for $28,000. Dan made a down payment of $6,000 and paid $390 monthly for 70 months. The total finance charge was:
A)$13,300
B)$5,300
C)$11,300
D)$27,300
E)None of these

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Multiple Choice

Q 28Q 28

Justin Chan bought a Scion car for a price of $8,200, putting down $800 and financing the remainder with 60 monthly payments of $179.99. The APR by table lookup is (use the tables in the handbook):
A)Close to 15%
B)Close to 14%
C)Close to 13 ½%
D)Between 16.00 and 16.25%
E)None of these

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Multiple Choice

Q 29Q 29

Given: $140.10 per month; cash price $5,600; down payment $0
Cash or trade months with bank-approved credit; amount financed $5,600
Finance charge $2,806
Total payments $8,406
(Use the tables in the handbook.) The APR by table lookup is:
A)17.25% - 17.50 %
B)17.00 %
C)16.75 %
D)16.50 %
E)None of these

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Multiple Choice

Q 30Q 30

Mia Lane bought a high-definition television for $7,500. Based on her income, she could afford to pay back only $600 per month. There is 1 ½% monthly interest charge on the unpaid balance. The U.S. Rule is used in the calculation. At the end of month 1, the balance outstanding is:
A)$6,012.50
B)$5,012.50
C)$4,012.50
D)$3,012.50
E)None of these

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Multiple Choice

Q 31Q 31

Ed Sloan bought a new Explorer for $22,000. He put down $7,000 and paid $290 for 60 months. The total finance charge to Ed is:
A)$15,000
B)$17,400
C)$2,400
D)$4,200
E)None of these

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Multiple Choice

Q 32Q 32

John Sullivan bought a new Brunswick boat for $17,000. He made a $2,500 down payment on it. The bank's loan was for 60 months. Finance charges totaled $4,900. His monthly payment is:
A)$313.33
B)$323.33
C)$332.33
D)$232.33
E)None of these

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Multiple Choice

Q 33Q 33

Given the following: The average daily balance is:
A)$910.34
B)$755.17
C)$810.43
D)$755.71
E)None of these

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Multiple Choice

Q 34Q 34

Amanda Chin purchased a home for $296,000; she put 20% down with a mortgage rate of 6% for 30 years. What is Amanda's monthly payment?
A)$1,776
B)$1,402
C)$1,240.80
D)$1,420.80
E)None of these

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Multiple Choice

Q 35Q 35

Darlene Ramirez bought a home for $140,000. She put 20% down with a mortgage rate of 7.5% for 25 years. Her yearly payments are:
A)$1,776
B)$9,932.16
C)$12,415.20
D)$9,329.61
E)None of these

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Multiple Choice

Q 36Q 36

Given a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges?
A)$50,236.80
B)$5,023.68
C)$545.76
D)$54,576
E)None of these

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Multiple Choice

Q 37Q 37

A condo in Orange Beach, Alabama, listed for $1.4 million with 20% down and financing at 5% for 30 years. What would the monthly payment be?
A)$7,518
B)$6,014.40
C)$6,041.20
D)$7,815.00
E)None of these

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Multiple Choice

Q 38Q 38

Jen purchased a condo in Naples, Florida, for $699,000. She put 20% down and financed the rest at 5% for 35 years. What are Jen's total finance charges?
A)$457,425.60
B)$606,823.20
C)$626,863.20
D)$600,000.00
E)None of these

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Multiple Choice