MATH 10S EXAM2 Spring 2018 Name Multiple Choice: Clearly write the letter of the best answer to each question IN front of the corresponding question number. (1 point each) THE 1. Credit card interest is usually Lower than interest on other types of loans b. a. Higher than interest on other types of loans c. About the same as other types of loans 2. In the loan payment formula, assuming all other variables are constant, the monthly payment a. increases as P increases b. increases as APR decreases c. increases as Y increases 3. With the same APR and amount borrowed, a 15 year loan will have A higher monthly payment than a 30-year loan b. a. A lower monthly payment than a 30-year loan A payment that could be greater or less than that of a 30-year loan. c. In the early years of a 30-year mortgage a. Most of the payment goes to the principal b. Most of the payment goes to interest c.Equal amounts go to principal and interest 4. 5. Credit card loans are different from installment loans in that a. Credit card loans do not require regular (monthly) payments b. Credit card loans do not have an APR c. Credit card loans do not have a set loan term You are currently paying off a student loan with an interest rate of 9% and a monthly payment of $450. You are offered the chance to refinance the remaining balance with a new 10-year loan with an interest rate of 8% that will give you a significantly lower monthly payment. Refinancing in this way 6. a. Is a good idea b. Is a good idea if it lowers your monthly payment by at least $100 c. May or may not be a good idea, depending on closing costs and how many years you have remaining in your current loan term 7. The total amount of income you receive is called your a. Gross income b. Net income c. Taxable income