2-You have $3000 available for a down payment on a car and have determined that you can afford up to $200 per month for auto financing costs. If your bank has quoted a 12% APR rate on a 48-month car loan, the maximum car you can afford?

$12600

$9600

$7595

$10595

3-Maria owns an SUV that gets approximately 15 miles per gallon. If Maria drives 20000 miles in a year and the average cost of a gallon of gasoline is $2.40, what is Marias approximate annual gasoline cost?

$8333

$7000

$3200

$1333

4-Jason has started filling out the paperwork for a mortgage to buy a house selling for $280000. He has $42000 for the down payment but doesnt want to purchase mortgage insurance. What will Jasons mortgage lender most likely require?

Jason will have to put up an additional $5000.

Jason will have to put up an additional $42000.

Jason will have to put up an additional $28000.

Jason will have to put up an additional $14000.

5-How much does one discount point cost on a $148000 mortgage for a $230000 home?

$1480

$14800

$2300

$1150

6-You are considering buying a house for $300000. The principal and interest payment on a $215000 30-year mortgage at 7% APR is $1430. What would the payment be for a 15-year mortgage at 7% APR?

$833

$1254

$1932

$1750

7-A lender offers a 30-year mortgage at 5% with no points (mortgage payment = $521) or a 30-year mortgage at 4.75% with 1 point (mortgage payment = $507). If the loan amount is $100000, this is a good deal for the borrower as long as he or she plans to keep the mortgage for at least

51 months.

14 months.

71 months.

17 months.

8-Which of the following is NOT a component of the auto dealer profits?

Interest on car loan

Extended warranties and service contracts

Vehicles traded in for less than resale value

Delivery and preparation fee

9-The purpose of lemon laws is to:

prevent sellers of automobiles from charging consumers more than they are worth.

protect car buyers from sellers of chronically defective automobiles.

necessitate auto sellers to pay for all repairs to vehicles that they sell.

protect small manufacturers of autos from uncompetitive practices of large corporations.

10-Which of the following is an advantage of renting instead of buying a home?

Tax deduction

Stable monthly payments over time

Less responsibility

Investment value

11-With an amortized loan, your

loan principal is discounted by the interest for the loan.

monthly payment consists of principal repayment only.

monthly payment consists of both interest and principal repayment.

monthly payment consists of interest only.

12-What is the primary advantage of listing your house for sale with a real estate broker rather than trying to sell it on your own?

You will make more money on the sale.

A broker will show the home to all prospective buyers.

A broker may have better knowledge of the market and can help you price the home appropriately.

A broker will negotiate the price for you with potential buyers.

13-If you buy a house and prepay a few months of taxes and insurance at the closing, you are using

discount points.

escrow.

estimated tax payment.

tax withholding.

14-The first step in making consumer purchase decisions is to

negotiate the best price.

determine what you need.

research your alternatives.

determine what you can afford.

15-Whenever you decide to buy something, you're also deciding not to

spend the money on something else.

save those funds.

invest those funds.

All of the choices are correct.