1. Which event will have the greatest impact (positive or negative) on one's net worth after one month?
Buy a used car at market value for $15,000
Buy a new car at market value for $15,000. Car depreciates 20% upon transfer of ownership.
Lease a $15,000 car on a 3 year lease. The monthly payment is $199 and all lease payments are required in the lease.
None of these events will impact the net worth of an individual
2. If a home mortgage has a term of 15 years and a payment of $1,000, what is the loan amount? (assume that there are no interest-free mortgages)
$180,000
$200,000
$360,000
Less than $180,000
3. If a home buyer puts 20% down on a $200,000 house and uses a mortgage to borrow the rest, how much will the mortgage be (excluding any closing costs)?
$240,000
$160,000
$180,000
$200,000
4. Which of the following will increase your net worth the most?
All of these increase net worth
Purchase a used car valued at $7,000 with an Auto Loan for $7,000
Purchase of house valued at $150,000 with $25,000 down and a mortgage of $125,000
Sell a bike valued at $75 for $75 cash
None of these increase net worth
5. Sub-prime lending rates are 1) __________ than prime lending rates and are for people with 2)__________ credit.
1) lower 2) poor
1) lower 2) good
1) higher 2) poor
2) higher 2) good
6. Which loan type isn't secured with collateral?
Small business loans
Subsidized student loans
Auto loans
None of the answers are correct
All of the answers are correct
Mortgages (home loans)