Question 16(0.15 points)

You are comparing the cost of credit to the cash price of an item. If you make a down payment of $50 and pay $54 per month for 12 months, how much more will that amount be than a cash price of $649?

Your Answer:

Question 17(0.15 points)

A payday loan company charges you 4% interest to borrow money for just two weeks. What is the equivalent annual percentage rate?

Your Answer:

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Don't forget to answer as a decimal equivalent instead of a percentage. For example, enter 1.23 instead of 123%.

Question 18(0.15 points)

You are currently paying $625 in interest on your credit cards annually. If, instead of paying interest, you saved this amount every year, how much would you accumulate in a tax-deferred account earning 5% over the next 15 years?

Your Answer:

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I recommend using the online financial calculator and selecting the future value "FV" tab.

Question 19(0.15 points)

An online buying club offers a membership for $125, for which you will receive a 6% discount on all items you purchase through the club. How much would you have to buy to cover the cost of membership?

Your Answer:

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For example, if18% * Purchases = Discount and the question asks at what level of purchases does your discount only cover the cost of the membership ($150), then in other words, you need to solve the following equation: 18% * Purchases = 150.

Question 20(0.15 points)

Using the following balance sheet items and amounts, calculate the total liquid assets.

• Money market account $9054
• Retirement account $61700
• Medical bills $690
• Checking account $6767
• Credit card balance $1135

Your Answer:

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Assets are things you own. Liquid assets are those easily converted to cash. Some on the list, for example medical bills, are not assets, but rather liabilities, which are things you owe. Be careful that some assets are not easily converted to cash. For example, often money cannot be withdrawn from a retirement account where it is likely invested. There are also penalties and tax implications of early withdrawals from a retirement account.