Question 1

Topics: Interest, Interest rates, Annual percentage rate Pages: 10 (1386 words) Published: April 13, 2015
  
Question 1
1. Beverly Frost bought a home for $190,000 with a down payment of $19,000 at 7% for 25 years. Since then the rate has risen to 9%. How much more would her monthly payment be if she bought the house at 9%?

a.
$143.00

b.
$208.97

c.
$436.40

d.
None of these

e.
$227.43
1 points   
Question 2
1. The total cost of interest is equal to the total of all monthly payments:

a.
Divided by amount of mortgage

b.
Minus amount of mortgage

c.
Times amount of mortgage

d.
Plus amount of mortgage

e.
None of these
1 points   
Question 3
1. On March 12, Bill Jones accepted a $12,000 note in granting a time extension of a bill for goods purchased by Ron Prentice. Terms of the note were 13% for 90 days. On April 24, Bill could no longer wait for the money and discounted the note at Able Bank at a discount rate of 14%. The proceeds to Bill is:

a.
None of these

b.
$12,390.00

c.
$12,047.90

d.
$12,163.54

e.
$12,048.90
1 points   
Question 4
1. Marsha Terban bought a home for $119,000 with a down payment of $19,000. Her rate of interest is 12 1/2% for 35 years. The balance of the mortgage at the end of the first month is:

a.
None of these

b.
$99,669.76

c.
$99,985.67

d.
$3.33

e.
$98,944
1 points   
Question 5
1. A simple discount note results in:

a.
Interest deducted when note is paid back

b.
None of these

c.
Interest deducted in advance

d.
Lower interest costs than a simple interest note

e.
Same interest costs as a simple interest note
1 points   
Question 6
1. Tiffany purchased a $10,000, 13-week Treasury bill that is paying 2.25%. What is the effective rate on this T-bill?

a.
2.7%

b.
2.0%

c.
2.26%

d.
2.2%

e.
None of these
1 points   
Question 7
1. 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.
$1,240.80

b.
$1,402

c.
$1,420.80

d.
None of these

e.
$1,776
1 points   
Question 8
1. An amortization schedule shows:

a.
Increase in loan outstanding

b.
The increase to principal

c.
Portion of payment broken down to interest and principal

d.
Balance of interest outstanding

e.
None of these
1 points   
Question 9
1. The APR represents the:

a.
True effective annual rate of interest charged by buyer

b.
None of these

c.
True effective quarterly interest rate charged by seller

d.
True effective annual rate of interest charged by seller

e.
Stated rate of interest
1 points   
Question 10
1. In calculating the bank discount when discounting an interest-bearing note, which one of the following is not used in the calculation?

a.
Principal proceeds

b.
None of these

c.
Maturity value

d.
Bank discount rate

e.
Discount period
1 points   
Question 11
1. Most companies calculate the finance charge on credit card accounts as a percentage of the:

a.
Weekly balance

b.
None of these

c.
Average daily balance

d.
Daily balance

e.
Average weekly balance
1 points   
Question 12
1. Joe Jay purchased a new colonial home for $260,000, putting down 20%. He decided to use Loyal Bank for his mortgage. They were offering a 6 1/2% for a 25-year mortgage. The principal after the first payment had a balance outstanding of:

a.
$207,720.95

b.
$207,720.59

c.
None of these

d.
$207,270.59

e.
$207,270.95
1 points   
Question 13
1. 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.
None of these

c.
$11,300

d.
$27,300

e.
$5,300
1 points   
Question 14
1. Given a mortgage of $48,000 for 15 years with a rate of 11%, what are the total finance charges?

a.
$5,023.68

b.
$50,236.80

c.
None of these

d.
$54,576

e.
$545.76
1 points   
Question 15
1. With a mortgage of $48,000...
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