Chapter 18 Class Review

Large purchases (such as motorcycles and automobiles) are commonly bought  using

• A bank credit card

• Installment credit

• A charge account

• Trade credit

Which of the following is an advantage of using credit?

• Lower credit rating

• Overbuying

• Convenience

• Higher prices

Signing a promissory note occurs when using

• A credit card

• A loan

The principal of a loan is the total amount of interest that will be paid

• True

• False

The most valuable number to consider when comparing credit among various borrowing sources is the

• Maturity date

• Annual percentage rate

• Principal

• Total finance charge

A reputation for paying bills one time relates to a person’s

• Capital

• Collateral

• Capacity

• Character