Amount of money borrowed or invested

Question

Question 1. The amount of money borrowed or invested is called the maturity value. ()

• True
• False

Question 2. When solving a simple interest problem, the rate should be written as a decimal number. ()

• True
• False

Question 3. 8% for 45 days is equal to 0.01. ()

• True
• False

Question 4. Bank loans and car loans are examples of open-end loans. ()

• True
• False

Question 5. The cash price of an item is the amount you would have paid if the full amount was paid at the time of purchase. ()

• True
• False

Question 6. The total cost of an installment purchase is equal to the number of payments times the amount of each payment minus the down payment. ()

• True
• False

Question 7. The Truth in Lending Act requires the APR be accurately stated to the nearest of 1 percent. (s: )

• True
• False

Question 8. The monthly payments are calculated by adding the finance charge and the amount financed and dividing by the number of payments in the loan. ()

• True
• False

Question 9. A term frequently used to mean interest is: ()

• annual percent rate charge
• finance charge
• carrying charge
• both B and C
• none of the above

Question 10. The amount of a loan is: ()

• the installment price + interest - down payment
• installment price - interest - down payment
• installment price - interest + down payment
• installment price - payments + purchases
• none of the above

Question 11. John purchased a new boat for $24,600.00. He put a $5,400.00 down payment on it. The bank's loan was for 60 months. Finance charges totaled $6,400.00. His monthly payment was: ( )

• $106.67
• $410.00
• $250.00
• $426.67
• none of the above

Question 12. The formula for ordinary interest using exact time is: ()

• exact days divided by 365
• exact days divided by 360
• 30 divided by 360
• 30 divided by 365
• none of the above

Question 13. The method used to calculate interest that is sometimes known as the Banker's Rule is: ()

• exact interest using exact time
• exact interest using ordinary time
• ordinary interest using ordinary time
• ordinary interest using exact time
• none of the above

Question 14. The proceeds of a $7,500.00, 10% simple discounted note for 85 days is: (

• $7,674.66
• $7,322.92
• $7,677.08
• $7,325.34
• none of the above

Question 15. In a non-interest bearing note, the maturity value is the same as the: ()

• proceeds
• principal
• discount
• principal plus interest
• none of the above