4.1 Intro to Credit

Which word represents the total cost of an item you're purchasing on credit minus any down payment you make up front?

• principal

• term

• interest rate

• APR

Each of the following represents an installment loan EXCEPT . . .

• homre mortgage

• auto loan

• student loan

• credit card

Which of these actions would most likely decrease a person's net worth for a least the next 6 months?

• use a loan to buy a brand new car

• work 10 hours overtime each week and put all extra earnings into a savings account

• Work 10 hours overtime each week and put the extra earning to pay down student loan debt

• Open 3 new credit cards but don't spend any money on them