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Basics Beginner:
Managing Your Debt
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
You will usually have to pay additional costs for the privilege of consolidating your loans.
Choose wisely. There is only one correct answer.
True
False
True. Take these costs into account before you consolidate loans.
2.
To determine how much you should pay each month on credit card bills, _______.
Choose wisely. There is only one correct answer.
Divide the balance by the number of months you want to pay it off
Use a financial calculator
Use the minimum amount due
Use twice as much as the minimum amount due
Use a financial calculator. Enter the number of months, interest rate, and principal balance to calculate the monthly payment.
3.
Which of the following is true about bankruptcy?
Choose wisely. There is only one correct answer.
Chapter 7 is designed to restructure your debt.
Chapter 13 helps by liquidating your debt.
It should be your last resort to resolve debt problems.
All of the above are true.
It should be your last resort to resolve debt problems. Chapter 7 is liquidation bankruptcy, while Chapter 13 restructures your debt.
4.
Which of the following are ways to lower your monthly debt payments?
Choose wisely. There is only one correct answer.
Reduce the principal
Reduce the interest rate
Extend your payments over a longer period
All of the above
All of the above. These are all ways to reduce your monthly debt payments.
5.
When you pay back a loan, the amount of the monthly loan payments is determined by _______.
Choose wisely. There is only one correct answer.
The principal
The interest
The number of months payments must be made
All of the above
All of the above. Principal, interest, and the term (months) of the loan determine how much each monthly payment should be.
6.
Paying only the minimum amount due on a credit card bill _______.
Choose wisely. There is only one correct answer.
Decreases the cost and time it takes to repay
Decreases the cost but increases the time it takes to pay
Increases the cost and the time it takes to repay
Increases the cost but reduces the time it takes to repay
Increases the cost and the time it takes to repay. It is best to repay higher interest rate loans faster.
7.
If you are in debt, why is it important to first deal with the causes of the debt?
Choose wisely. There is only one correct answer.
It can prevent them from recurring
The causes of the debt are always your fault
It is not important to deal with the causes of the debt; that won't help
It can prevent them from recurring. Though not guaranteed to, there is a good chance you can prevent future occurrences.
8.
Which type of goods usually become worth less over time?
Choose wisely. There is only one correct answer.
Consumer goods
Investment goods
Consumer goods. Consumer goods are bought to be used up. Investment goods are bought to provide income or appreciation of value.
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DONE