Personal Finance Final Exam

1. Magda is going to finance her car purchase using an auto loan. Which statement below is accurate?

• Her principal is the cost of the car, minus any down payment she makes
• Her interest rate is the total cost she’ll pay after making all of her principal and interest payments
• Choosing a shorter term means it will take her longer to repay the loan
• It’s likely that her monthly payment will be between 4-5% of the cost of the car

2. Jaime is creating a budget for the first time and doesn’t know which to use - NET PAY or GROSS PAY. What do you tell him?

• “Use net pay, because it’s the total amount you’ve earned minus taxes and other deductions.”
• “Use gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month.”
• “Use net pay, because it’s the total amount you’ve earned for the month.”
• “Use gross pay, because that is the amount that is reported to the government for taxes.”

3. Why is sending a personalized thank you after a job interview important?

• It shows that you want the job even if you don’t really like the company
• You can apologize for any mistakes you made in the interview
• It gives you the opportunity to leave a good impression by expanding on an answer you gave or a topic you discussed
• It allows you to boast about your accomplishments one last time

4. What do you need to subtract from a college’s cost of attendance in order to find the net price?

• Student Aid Index
• Application fees
• Personal expenses
• Your grants and scholarships

5. All of the following are characteristics of a secured credit card EXCEPT…

• Your credit limit is dependent on the amount of your security deposit
• They lower the risk of banks when issuing credit to users with no credit history
• They help you build a credit history and improve your credit score
• They don’t have a spending limit, so you have to be very mindful of how much you buy with them

6. Zoe buys three new lipsticks from a store at the mall. Which payment method would reduce the amount of money in her checking account?

• Pays with a prepaid card she loaded earlier in the month
• Uses her credit card and says, "Credit" when the cashier asks, "Credit or debit?"
• Uses her debit card and says, "Credit" when the cashier asks, "Credit or debit?"
• Pays with cash she had in her purse

7. The monthly premium for Kevin’s renters insurance is $15, and his deductible is $500. During the month of April, someone breaks into his apartment and steals or destroys $2200 worth of his possessions. How much will Kevin pay and how much will the insurance pay to replace his items?

• Kevin pays $0 // insurance company pays $2200
• Kevin pays $15 // insurance company pays $2200
• Kevin pays $500 // insurance company pays $2200
• Kevin pays $500 // insurance company pays $1700

8. Which definition best describes the FAFSA?

• The amount of money the federal government offers you in student loans
• The paperwork your bank has you complete in order to take out a personal student loan
• The paperwork you complete in order to have part of or all of your student loan debt forgiven
• The application you submit in order to determine eligibility for federal student aid

9. Which of the following best describes the amount of money you'll have if you put $1000 into a savings account earning 1% annual compound interest for 10 years? You can ignore the impact of inflation in this question.

• Exactly $1100
• Slightly more than $1100
• $2000
• Exactly $11,000

10. All of the following can be found in your credit report EXCEPT…

• Your credit payment history
• Your checking account balance history
• The average age of your credit accounts
• Your total number of active credit accounts