FA-7.0 Types of Credit & Modeling Functions Unit Assessment

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PERIOD

• Period 2
• Period 3
• Period 5

1. Each of the following is an installment loan, except for a(n) ___________, which is a revolving line of credit.

• Auto loan
• Credit card
• Mortgage
• Student loan

2. Keon plans to buy a new GMC Sierra for $47,000 at 5.5% APR. Which financing option would have the lowest total interest?

• 60-month term and $2,000 down payment
• 60-month term and $3,500 down payment
• 36-month term and $3,500 down payment
• 36-month term and $5,000 down payment

3. In order to take out federal student loans, you need to…

• Have a credit score above 600
• Complete and submit the FAFSA
• Choose a repayment plan before enrolling
• Take out at least $6000 in private student loans

4. Which of the following is an example of a secured debt?

• A credit card
• A student loan
• An auto loan
• A personal loan from family

5. Which of the following best describes a Schumer box?

• The portion of your monthly credit card bill that lists the minimum monthly payment due
• The portion of your credit card agreement that lays out the important rates and fees
• The portion of your credit card application that asks for your income and employment status
• The portion of a plastic credit card that holds the magnetic stripe or chip

6. What is the main difference between an annual interest rate and an annual percentage rate (APR)?

• APR is the interest rate combined with guaranteed fees
• APR is almost always lower than interest rate
• Interest rate is for loans, while APR is for credit cards
• Interest rate is money you earn on investments, while APR is money you pay for debt

7. For most American households, the largest source of debt is:

• Student loans
• Credit cards
• Medical debt
• Mortgages