Installment Buying and Revolving Charge Credit Cards

The amount financed equals the cash price plus the down payment.

• True

• False

The cost of credit reports would be included in the amount financed.

• True

• False

Amortization is not a payment process. True or False?

• True

• False

Finance charge equals total of all monthly payments minus amount financed.

• True

• False

The APR represents the stated interest rate.

• True

• False

The Truth in Lending Act regulates interest charges. True or False?

• True

• False

APR cannot be calculated using a financial calculator.

• True

• False

Calculating the APR by formula is as accurate as calculating the APR by financial calculator.

• True

• False

The Truth in Lending Act requires that creditors inform buyers of the finance charge and APR in writing before buyers sign a credit agreement.

• True

• False

When the add-on method is used, the monthly payment is calculated by adding the finance charge and amount financed and dividing by the number of monthly payments.

• True

• False