Question 1

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-Paying mortgage points to get a lower rate of interest makes more sense if you expect to live in a home for a [longer | shorter] period of time.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 2

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

Accepted Answer

The answer of Billy and Suzie want to calculate the...

Question 3

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%,48-month loan for the new car she is purchasing.If Leslie will be financing $15,000 and she can get a 7.5%,48-month loan at her credit union,should she take the $1,000 rebate or the 5.5% loan?

Accepted Answer

The answer of Leslie has been offered the choice of...

Question 4

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-A decrease in the "rent ratio" indicates that housing is relatively [more | less] affordable than renting.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 5

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-The [longer | shorter] the period of time you expect to live in a house,the more likely refinancing is a sound financial decision.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 6

If a lender requires that mortgage payments cannot exceed 30% of gross income and total loan payments cannot exceed 38% of gross income,calculate the monthly payment for which a person with the following financial data could qualify.

Accepted Answer

The answer of If a lender requires that mortgage payments...

Question 7

Your mortgage payment is $1,500 per month.Of this amount,insurance is $50,property taxes are $200,and interest is about $1,100.Assuming you have other itemized deductions that already exceed your standard deduction and that you are in the 31% marginal tax bracket,what is the reduction in your tax liability as a result of owning a home with this mortgage.

Accepted Answer

The answer of Your mortgage payment is $1,500 per month.Of...

Question 8

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-For most homeowners,the most important financial reason for owning a home is for the [inflation hedge | tax shelter].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 9

Patrick would like to know the monthly payments and the total finance charges on the following 2 loans:
a.
$30,000,9%,36 months
b.
$30,000,9%,48 months

Accepted Answer

The answer of Patrick would like to know the monthly...

Question 10

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-The Real Estate Settlement Procedures Act governs [mortgage rates | mortgage closings].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-Homeowners may be able to deduct [mortgage principal | mortgage interest] from their taxable income.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 12

Janice wants to buy a new car.The cost is $30,000.At the end of six years,the car is expected to be worth 20% of the original price.
a.
What will the car value be in six years?
b.
What is the annual depreciation on the car?

Accepted Answer

The answer of Janice wants to buy a new car.The...

Question 13

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-As home prices have fallen the "rent ratio" has [increased | decreased].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 14

Dick and Jane (and their dog Spot)have just purchased a house and are calculating how much money they will need when the closing day rolls around.The purchase price is $200,000.They will make a 20% down payment,and they must pay 2 points on the loan.Closing costs should be 3% of the purchase price.What is the total dollar amount they will need at closing?

Accepted Answer

The answer of Dick and Jane (and their dog Spot)have...

Question 15

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-A convertible ARM will have a [higher | lower] interest rate than a traditional ARM.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 16

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement.
-Longer term auto loans have a [lower rate but higher payment | higher rate but lower payment].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 17

Judy has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400.She wants to finance a vehicle over no more than 4 years.If lenders are currently offering 6 percent interest on 5-year loans,what is the maximum price Judy can pay for a vehicle?

Accepted Answer

The answer of Judy has $2,000 for a down payment...

Question 18

Greg has negotiated a $20,000 price on a new pick-up truck.The manufacturer is offering a $1,500 rebate or 3.9 %,three-year financing.Greg is also able to get 7 %,three-year financing at his credit union.If Greg plans to finance $18,000 over three years,should he take the rebate or the 3.9 % financing?

Accepted Answer

The answer of Greg has negotiated a $20,000 price on...

Quiz 5: Making Automobile and Housing Decisions

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%,48-month loan for the new car she is purchasing.If Leslie will be financing $15,000 and she can get a 7.5%,48-month loan at her credit union,should she take the $1,000 rebate or the 5.5% loan?

If a lender requires that mortgage payments cannot exceed 30% of gross income and total loan payments cannot exceed 38% of gross income,calculate the monthly payment for which a person with the following financial data could qualify.

Patrick would like to know the monthly payments and the total finance charges on the following 2 loans: a. $30,000,9%,36 months b. $30,000,9%,48 months

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -The Real Estate Settlement Procedures Act governs [mortgage rates | mortgage closings].

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Homeowners may be able to deduct [mortgage principal | mortgage interest] from their taxable income.

Janice wants to buy a new car.The cost is $30,000.At the end of six years,the car is expected to be worth 20% of the original price. a. What will the car value be in six years? b. What is the annual depreciation on the car?

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -As home prices have fallen the "rent ratio" has [increased | decreased].

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -A convertible ARM will have a [higher | lower] interest rate than a traditional ARM.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Longer term auto loans have a [lower rate but higher payment | higher rate but lower payment].

Judy has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400.She wants to finance a vehicle over no more than 4 years.If lenders are currently offering 6 percent interest on 5-year loans,what is the maximum price Judy can pay for a vehicle?