Credit Knowledge Quiz

What is the primary benefit of using credit?

• You can spend money you don't have right away.

• You can avoid paying bills.

• You can increase your savings.

• You can accumulate debt.

Which of the following is a cost associated with using credit?

• Interest charges

• Improved credit score

• Loyalty rewards

• Free merchandise

Which type of credit typically has the highest interest rate?

• Mortgage

• Credit card

• Auto loan

• Student loan

When purchasing a $500 item with a 6% sales tax, what is the total price?

• $530

• $560

• $600

• $650

If you buy a $200 appliance with a 12% finance charge, what is the total cost?

• $224

• $250

• $250.40

• $272

What is the total price of an item if the original cost is $2,000, the interest is $300, and the finance charge is $100?

• $2,000

• $2,100

• $2,300

• $2,400

What is the interest charge for a single payment loan of $1,000 at 8% interest for 1 year?

• $80

• $100

• $120

When you calculate installment loan costs, which of the following factors must be considered?

• Amount financed, finance charge, interest rate, and number of payments

• Only the interest rate

• Only the number of payments

• Only the amount financed

What is the average daily balance method used to calculate?

• Loan repayment

• Finance charge

• Total amount financed

• Monthly installment

What does an amortization table show?

• Total interest paid

• Loan balance over time

• Monthly payments

• All of the above