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Financial Literacy Test Guide #1 Questions and Answers $8.49   Add to cart
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Financial Literacy Test Guide #1 Questions and Answers
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  • Course
  • Financial Literacy
  • Institution
  • Financial Literacy

What is the term of the loan? - Answer-How long you have to repay your loan. What is interest? - Answer-The fee you pay for borrowing money What is Principal? - Answer-The amount of money being borrowed What is the difference between a fixed and variable rate? - Answer-A fixed interest rat...

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  • October 13, 2024
  • 2
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • financial literacy test guide 1 questions and ans
  • what is the term of the loan answer how long y

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  • Financial Literacy
  • Financial Literacy

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Financial Literacy Test Guide #1
Questions and Answers
What is the term of the loan? - Answer-How long you have to repay your loan.

What is interest? - Answer-The fee you pay for borrowing money

What is Principal? - Answer-The amount of money being borrowed

What is the difference between a fixed and variable rate? - Answer-A fixed interest rate
doesn't change while a variable interest rate does.

What is the difference between a secured and an unsecured loan? - Answer-A secured
loan has collateral that the lenders can take back if the buyer stops paying. A unsecured
loan does not.

Who does PMI protect? - Answer-The lender

What is a co-signer? - Answer-Someone who is obligated to pay back the loan if the
borrower is unable to.

What is PMI? - Answer-Insurance you have to pay if you cannot put 20 percent down on
a house.

If someone chooses a Graduated repayment plan, what are they expecting of their
current income? - Answer-To increase

What is the benefit of choosing an extended repayment plan? - Answer-Have lower
monthly payments.

When applying for credit, do you want a high or low interest rate? - Answer-Low

If you lower your monthly payments, what happens to your interest? - Answer-It will
increase

Name 3 things that determine interest rate - Answer-co-signer, employment history,
credit score, repayment history

For a 3/1 ARM loan, what does the 3 stand for? - Answer-The period of time the interest
rate is fixed.

In the early phases of an amortization schedule where does most of the monthly
payment go? - Answer-To interest.

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