Unit 8 (Loans) - Exam Review

What is your overall credit score if your score by category is:

- Payment History (35%): 700

- Credit Utilization (30%): 650

Length of Credit History (15%): 600

Credit Mix (10%): 550

New Credit (10%): 500

• 650
• 720
• 580
• 635

What is your overall credit score if your score by category is:

- Payment History (35%): 600

- Credit Utilization (30%): 650

Length of Credit History (15%): 700

Credit Mix (10%): 500

New Credit (10%): 450

• 650
• 720
• 580
• 605

What is the monthly payment on a 2 year, $1000 loan with a 4% interest rate?

• $50.25

• $43.25

• $30.25

• $60.75

What is the monthly payment on a 3 year, $2000 loan with a 6% interest rate?

• $50.00
• $60.84

• $75.00
• $100.00

If you can afford $1000 for a monthly mortgage and you are offered a rate of 6% for a 30 year mortgage, what is the most expensive house you can afford? Round to the nearest thousand.

• $167,000

• $56,000

• $123,000

• $201,000

If you can afford $500 for a monthly mortgage and you are offered a rate of 12% for a 15 year mortgage, what is the most expensive house you can afford? Round to the nearest thousand.

• $42,000

• $56,000

• $123,000

• $76,000

What happens to the portion of your monthly payment going towards interest over time?

• It increases

• It decreases

• It stays the same

What happens to the portion of your monthly payment going towards the principal over time?

• It increases

• It decreases

• It stays the same

If you are planning to only drive 14,000 miles per year for three years, would the loan terms or the lease terms lead to greatest cost savings?

• loan

• leasing

• they are the same number

If you are planning to drive 17,000 miles per year for three years, would the loan terms or the lease terms lead to the greatest cost savings?

• loan

• leasing

• they are the same number