Quiz about 3.1-3.4 Credit and Loans

Question 1

This is the form you must fill out before going to college in order to get aid from the government to pay for college

Accepted Answer

FAFSA

Answer

FASAF

Answer

FASFA

Answer

AFSAF

Question 2

A federal student loan is provided by...

Accepted Answer

US Federal government

Answer

Private companies

Answer

The state you live in

Answer

Investors

Question 3

A majority of students receive student loans/aid to help pay for college

Accepted Answer

True

Answer

False

Question 4

This is money you can get to pay for college, which has to be paid back.

Accepted Answer

Student Loan

Answer

Scholarhip

Answer

Grant

Answer

College Savings

Question 5

A subsidized loan is when ____________________ pays the interest while you are in school, while an unsubsidized loan is when ___________________ pays the interest while you are in school.

Accepted Answer

the government; the borrower

Answer

the government; parents

Answer

the borrower; parents

Answer

the borrower; the government

Question 6

Which federal loans are available for parents to take out for their children's education?

Accepted Answer

Direct PLUS Loans

Answer

Perkins Loans

Answer

Subsidized Direct Loans

Answer

Unsubsidized Direct Loans

Question 7

what are ways to avoid paying or minimizing your student loan debt?

Accepted Answer

obtain Scholarships/ Financial Aid
join debt relief government programs make timely payments on loan/ get a public service job, government or non profit.

Answer

buy food and forget about it

Answer

make more late payments

Answer

take out another loan to pay off that loan

Question 8

The time between when you graduate and when you must begin repayment of student loans

Accepted Answer

grace period

Answer

subsidized

Answer

award letter

Answer

unsubsidized

Question 9

A _________________ allows students to work on or off campus to earn money to help pay college costs.

Accepted Answer

federal work study

Answer

scholarship

Answer

grant

Answer

federal loan

Question 10

Scholarships and _______________ are both types of gift aid that do not have to be re-paid.

Accepted Answer

grants

Answer

federal work study

Answer

scholarships

Answer

alternative loans

Question 11

Stafford loans, Perkins loans, and Plus loans are all __________________ from the government.

Accepted Answer

federal loans

Answer

alternative loans

Answer

scholarships

Answer

grants

Question 12

Marlie will be starting college next month. She was approved for a 10-year, Federal Unsubsidized student

loan in the amount of $18,800 at 4.29%. She knows she has the option of beginning repayment of the loan

in 4.5 years. She also knows that during this non-payment time, interest will accrue at 4.29%.

How much interest will Marlie accrue during the 4.5-year non-payment period?

Accepted Answer

$3629.34

Answer

$2536.23

Answer

$3236.56

Answer

$3896.32

Question 13

Marlie will be starting college next month. She was approved for a 10-year, Federal Unsubsidized student

loan in the amount of $18,800 at 4.29%. She knows she has the option of beginning repayment of the loan

in 4.5 years. She also knows that during this non-payment time, interest will accrue at 4.29%.

Marlie has to decide whether she can afford to make interest-only payments for the first

4.5 years or defer all payments for that period of time. If she decides to make no payments

during the 4.5 years, the interest will be capitalized at the end of that period. Suppose Marlie

decides to defer the payments.

What will be the new principal when she begins making loan payments?

Accepted Answer

$22,429.34

Answer

$18,800

Answer

$20,000

Answer

$18,823.32

Question 14

Marlie will be starting college next month. She was approved for a 10-year, Federal Unsubsidized student

loan in the amount of $18,800 at 4.29%. She knows she has the option of beginning repayment of the loan in 4.5 years. She also knows that during this non-payment time, interest will accrue at 4.29%. Marlie has to decide whether she can afford to make interest-only payments for the first 4.5 years or defer all payments for that period of time. If she decides to make no payments during the 4.5 years, the interest will be capitalized at the end of that period. Suppose Marlie decides to defer the payments.How much interest will she pay over the life of the loan?

Accepted Answer

$5193.46

Answer

$5145.36

Answer

$5178.32

Answer

$5231.65

Question 15

Marlie will be starting college next month. She was approved for a 10-year, Federal Unsubsidized student

loan in the amount of $18,800 at 4.29%. She knows she has the option of beginning repayment of the loan

in 4.5 years. She also knows that during this non-payment time, interest will accrue at 4.29%.

Suppose Marlie only paid the interest during her 4 years in school and the six-month grace

period. What will she now pay in interest over the term of the loan?

Accepted Answer

$4352.80

Answer

$4789.35

Answer

$4123.56

Answer

$4258.36

Question 16

Barb is a freshman attending a 4-year college. She has been approved for a $12000 subsidized federal loan at 4.29% for 10 years. How much will the U.S. Department of Education pick up in interest costs during her 4.5-year non-payment period?

Accepted Answer

$2,316.60

Answer

$2,231.00

Answer

$2,121.00

Answer

$2,323.23

Question 17

Phil has been accepted into a 2-year Radiology Technician Program at a career school. He has been awarded a $9000 unsubsidized 10-year federal loan at 4.29%. He knows he has the option of beginning repayment of the loan in 2.5 years. He also knows that during this non-payment time, interest will accrue at 4.29%.

How much interest will Phil accrue during the 2.5-year non-payment period

Accepted Answer

$965.25

Answer

$963.23

Answer

$962.32

Answer

$923.36

Question 18

Phil has been accepted into a 2-year Radiology Technician Program at a career school. He has been awarded a $9000 unsubsidized 10-year federal loan at 4.29%. He knows he has the option of beginning repayment of the loan in 2.5 years. He also knows that during this non-payment time, interest will accrue at 4.29%.

If Phil decides to make no payments during the 2.5 years, the interest will be capitalized at the end of that period. What will be the new principal when he begins making loan payments?

Accepted Answer

$9,965.25

Answer

$9,789.32

Answer

$9,128.48

Answer

$9,145.39

Question 19

Suppose that Phil had decided to take out a private loan for $9,000 where loan payments start as soon as the loan amount is deposited in his student account and continue for 10 years. The interest rate is 8.1%.

Determine his monthly payment

Accepted Answer

$109.67

Answer

$105.23

Answer

$105.36

Answer

$111.89

Question 20

Suppose that Phil had decided to take out a private loan for $9,000 where loan payments start as soon as the loan amount is deposited in his student account and continue for 10 years. The interest rate is 8.1%.

What is the total amount he will pay back?

Accepted Answer

$13,160.40

Answer

$14,237.00

Answer

$13,235.78

Answer

$13,156.39

Question 21

Suppose that Phil had decided to take out a private loan for $9,000 where loan payments start as soon as the loan amount is deposited in his student account and continue for 10 years. The interest rate is 8.1%. What is the total interest amount?

Accepted Answer

$4,160.40

Answer

$4,369.23

Answer

$4,180.45

Answer

$4,178.49

Question 22

One reason you might want to make the final payment of your loan before the end of the term is so that you will pay less interest.

Accepted Answer

True

Answer

False

Question 23

Sarah is buying a new couch for $989. She made a down payment of $200 and financed the remainder. What amount did she finance?

Accepted Answer

$789

Answer

$766

Answer

$799

Answer

$877

Question 24

An APR of 25.99% in decimal form is....

Accepted Answer

.2599

Answer

.02599

Answer

2.599

Answer

25.99

Question 25

Interest can be defined as:

Accepted Answer

the amount owed for borrowing money

Answer

a charge for lending money

Answer

the amount added into your savings account when opening a bank account

Answer

a charge for convenience of accessing money in your bank

Question 26

Select all of the following agencies which are "Credit Reporting Agencies"

Accepted Answer

Equifax

Accepted Answer

Trans-union

Answer

Geico

Answer

Progressive

Question 27

What is a Grace Period?

Accepted Answer

A period where the Bank will give you extra time to pay off what you owe

Answer

A period where you don't have to pay interest

Answer

A period where if you pay, then you don't have to pay interest

Answer

A period where interest is accumulating but you don't have to pay it

Question 28

To decrease your total student debt, it is a good idea to do which of the following?

Accepted Answer

Pay the interest on your loans while you are still in school

Answer

Take out student loans that amount to more than you expect to earn in the first year after you graduate

Answer

Borrow private loans first

Answer

Take an extra year to graduate (5 years total)

Question 29

The longer the loan term the less total interest you pay.

Accepted Answer

False

Answer

True

Question 30

If my credit score is around 500, should my interest be high or low

Accepted Answer

High Interest

Answer

Low Interest

Question 31

_________ loans are reserved for parents of undergraduate or graduate students in whose case direct loans are not enough.

Accepted Answer

Direct PLUS

Answer

Direct Loans

Answer

Perkins Loans

Question 32

A subsidized loan is one where _____________________ pays for the interest while the student is still enrolled in school.

Accepted Answer

the federal government

Answer

the parents

Answer

the borrower

Question 33

An unsubsidized loan is one where ___________________ pays the interest while the student is still enrolled in school.

Accepted Answer

the borrower (i.e. student, parent)

Answer

the federal government

Question 34

What is one thing a student should do before pursuing a private loan?

Accepted Answer

get a part-time job to help cover costs

Answer

decide not to go to college

Answer

go out of state for college

Question 35

Which of the following is NOT a type of federal loan?

Accepted Answer

private

Answer

Direct

Answer

Direct PLUS

Answer

Perkins

Question 36

Shawn wants to buy a bicycle, which costs $740. If he can save $45 a month, how long will it take for him to save up for the bicycle?

Accepted Answer

17 months

Answer

12 months

Answer

16 months

Answer

24 months

Question 37

In the past billing period, Nancy made payments totaling $450, purchases totaling $1,178.35, and a finance charge of $14.52. If her previous balance was $783.17, what is her new balance?

Accepted Answer

$1,526.04

Answer

$69.34

Answer

$40.57

Answer

$1,497.00

Question 38

What is Credit Rating?

Accepted Answer

Your credit "report card"

Answer

A count of the amount of credit cards you have

Question 39

Define Assets

Accepted Answer

Everything you own. Car, house, etc..

Answer

The people in your life

Question 40

Define Credit.

Accepted Answer

When you purchase something and don't pay for it right away

Answer

When you pay for something you purchase that day

Question 41

Define Down Payment

Accepted Answer

The part of selling price paid at the time of purchase

Answer

Your last monthly payment

Question 42

Mr. Dansereau bought a drum set for $1,455.00. He bought it on an installment plan. The plan requires a 15% down payment and 18 monthly payments of $80.78 each. How much is his down payment??

Accepted Answer

$218.25

Answer

$145.00

Answer

$200.00

Answer

None of these answers

Question 43

Mr. Dansereau bought a drum set for $1,450.00. He bought it on an installment plan. The plan requires a 15% down payment and 18 monthly payments of $80.78 each. How much will Mr. Dansereau pay for the drum set on the installment plan?

Accepted Answer

$1,672.29

Answer

$1,572.29

Answer

$1454.04

Answer

None of the above

Question 44

The policy of the pawn shop is to lend up to 30% of the value of a borrower's collateral. Sam wants to use a $2,000 guitar and a $900 camera as collateral for a loan. What is the maximum amount that he could borrow from the pawn shop?

Accepted Answer

$870

Answer

$700

Answer

$570

Answer

None of the above

Question 45

Your friend tells you he just got his credit report and scored a 900. Which of these describes your reaction?

Accepted Answer

You know he's not telling the truth because noone's credit score is that high.

Answer

You are impressed by his 90th percentile rating.

Answer

You wonder how his credit score is higher than yours.

Answer

You ask if he will get a loan for you to by a new sports car.

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