Section 3.1 installment payments DR Chapter

What is the goal of an emergency fund?

• To pay for large purchases

• To have cash on hand for unexpected events

• To pay for health insurance

• To save for your children's college expenses

Why do stores rarely advertise the full price of big purchases like smartphones?

• They are trying to keep their prices competitive.

• They are trying to cheat you.

• By showing you only the monthly payment, they make the product seem affordable.

• Hiding the full price allows stores to change their pricing as the market fluctuates.

The three reasons to save money are....

• To build wealth, give to charity, and get a lower interest rate for loans.

• For an emergency fund. mortgage a house, and pay bills.

• To get rich early in life, buy large purchases, and give to charity.

• For an emergency fund, for large purchases, and to build wealth

Pablo wants to purchase a drum set for his nephew. How can he calculate the monthly payments he would need to make?

• The price of the drum set divided by the number of years.

• The price of the drum set plus the sale tax, then divided by the number of months he would make payments.

• The price multiplied by the interest rate and number of years.

• The price divided by the interest and sales tax.

Which of the following is part of the formula that determines a person's FICO score?

• The dollar amount in their savings funds

• Their history of payments made to lenders

• The percent of income that they invest into mutual funds

• Their income level during a one year period

Your greatest tool to building wealth is .....

• Your credit score

• Your income

• Single stocks

• Tax cuts

Banks and lenders use credit scores to determine.....

• A person's financial responsibility

• How much collateral someone has available to put up for a loan

• The likelihood that someone is able to repay debt

• How successful someone is

Something that credit card commercials don't show you is.....

• How much your credit score will grow right away

• How happy your parents will be that they don't have to lend you cash anymore

• How great your life will be with payments

• People making payments for months or years on those credit card purchases

While saving money isn't easy at first, it will make your life a lot........... in the future if you make it a habit now.

• poorer

• harder

• longer

• easier

Once you're out of school, have started your career,

and have zero debt, your emergency fund should have....

• $5,000

• 3-6 months of living expenses

• 3-6 months of income

• $3,000