Multi choice: interest, amortization, loan, APR, Banker rule

1. The amount of money borrowed or invested is called the
maturity value. ()

True

False2. When solving a simple interest problem, the rate
should be written as a decimal number. ()

True

False3. 8% for 45 days is equal to 0.01. ()

True

False4. Bank loans and car loans are examples of open-end
loans. ()

True

False5. The cash price of an item is the amount you would
have paid if the full amount was paid at the time of purchase. ()

True

False6. The total cost of an installment purchase is equal to
the number of payments times the amount of each payment minus the
down payment. ()

True

False7. The Truth in Lending Act requires the APR be
accurately stated to the nearest of 1 percent. (s: )

True

False8. The monthly payments are calculated by adding the
finance charge and the amount financed and dividing by the number
of payments in the loan. ()

True

False9. A term frequently used to mean interest is: ()

annual percent rate charge

finance charge

carrying charge

both B and C

none of the above 10. The amount of a loan is: ()

the installment price + interest – down payment

installment price – interest – down payment

installment price – interest + down payment

installment price – payments + purchases

none of the above 11. John purchased a new boat for
$24,600.00. He put a $5,400.00 down payment on it. The bank’s loan
was for 60 months. Finance charges totaled $6,400.00. His monthly
payment was: ( )

$106.67

$410.00

$250.00

$426.67

none of the above 12. The formula for ordinary interest using
exact time is: ()

exact days divided by 365

exact days divided by 360

30 divided by 360

30 divided by 365

none of the above 13. The method used to calculate interest
that is sometimes known as the Banker’s Rule is: ()

exact interest using exact time

exact interest using ordinary time

ordinary interest using ordinary time

ordinary interest using exact time

none of the above 14. The proceeds of a $7,500.00, 10% simple
discounted note for 85 days is: (

$7,674.66

$7,322.92

$7,677.08

$7,325.34

none of the above 15. In a non-interest bearing note, the
maturity value is the same as the: ()

proceeds

principal

discount

principal plus interest

none of the above1. The amount of money borrowed or invested
is called the maturity value. ()

True

False

False: maturity value refers to the amount at the end, like a
CD on the expiration date.2. When solving a simple interest
problem, the rate should be written as a decimal number. ()

True

False

True: to avoid a 2 decimal place error.3. 8% for 45 days is
equal to 0.01. ()

True

False

True: .08 x 45 days / 360 = .014. Bank loans and car loans
are examples of open-end loans. ()

True

False

False: open end loans are more like lines of credit,
commercial or construction loans5. The cash price of an item is the
amount you would have paid if the full amount was paid at the time
of purchase. ()

True

False

True: meaning no impact of interest costs.6. The total cost
of an installment purchase is equal to the number of payments times
the amount of each payment minus the down payment. ()

True

…Each of the 15 questions gives a sentence or two of
explanation including calculations, as necessary

Multi choice: interest, amortization, loan, APR, Banker rule

1. The amount of money borrowed or invested is called the
maturity value. ()

True

False2. When solving a simple interest problem, the rate
should be written as a decimal number. ()

True

False3. 8% for 45 days is equal to 0.01. ()

True

False4. Bank loans and car loans are examples of open-end
loans. ()

True

False5. The cash price of an item is the amount you would
have paid if the full amount was paid at the time of purchase. ()

True

False6. The total cost of an installment purchase is equal to
the number of payments times the amount of each payment minus the
down payment. ()

True

False7. The Truth in Lending Act requires the APR be
accurately stated to the nearest of 1 percent. (s: )

True

False8. The monthly payments are calculated by adding the
finance charge and the amount financed and dividing by the number
of payments in the loan. ()

True

False9. A term frequently used to mean interest is: ()

annual percent rate charge

finance charge

carrying charge

both B and C

none of the above 10. The amount of a loan is: ()

the installment price + interest – down payment

installment price – interest – down payment

installment price – interest + down payment

installment price – payments + purchases

none of the above 11. John purchased a new boat for
$24,600.00. He put a $5,400.00 down payment on it. The bank’s loan
was for 60 months. Finance charges totaled $6,400.00. His monthly
payment was: ( )

$106.67

$410.00

$250.00

$426.67

none of the above 12. The formula for ordinary interest using
exact time is: ()

exact days divided by 365

exact days divided by 360

30 divided by 360

30 divided by 365

none of the above 13. The method used to calculate interest
that is sometimes known as the Banker’s Rule is: ()

exact interest using exact time

exact interest using ordinary time

ordinary interest using ordinary time

ordinary interest using exact time

none of the above 14. The proceeds of a $7,500.00, 10% simple
discounted note for 85 days is: (

$7,674.66

$7,322.92

$7,677.08

$7,325.34

none of the above 15. In a non-interest bearing note, the
maturity value is the same as the: ()

proceeds

principal

discount

principal plus interest

none of the above1. The amount of money borrowed or invested
is called the maturity value. ()

True

False

False: maturity value refers to the amount at the end, like a
CD on the expiration date.2. When solving a simple interest
problem, the rate should be written as a decimal number. ()

True

False

True: to avoid a 2 decimal place error.3. 8% for 45 days is
equal to 0.01. ()

True

False

True: .08 x 45 days / 360 = .014. Bank loans and car loans
are examples of open-end loans. ()

True

False

False: open end loans are more like lines of credit,
commercial or construction loans5. The cash price of an item is the
amount you would have paid if the full amount was paid at the time
of purchase. ()

True

False

True: meaning no impact of interest costs.6. The total cost
of an installment purchase is equal to the number of payments times
the amount of each payment minus the down payment. ()

True

…Each of the 15 questions gives a sentence or two of
explanation including calculations, as necessary

Multi choice: interest, amortization, loan, APR, Banker rule

1. The amount of money borrowed or invested is called the
maturity value. ()

True

False2. When solving a simple interest problem, the rate
should be written as a decimal number. ()

True

False3. 8% for 45 days is equal to 0.01. ()

True

False4. Bank loans and car loans are examples of open-end
loans. ()

True

False5. The cash price of an item is the amount you would
have paid if the full amount was paid at the time of purchase. ()

True

False6. The total cost of an installment purchase is equal to
the number of payments times the amount of each payment minus the
down payment. ()

True

False7. The Truth in Lending Act requires the APR be
accurately stated to the nearest of 1 percent. (s: )

True

False8. The monthly payments are calculated by adding the
finance charge and the amount financed and dividing by the number
of payments in the loan. ()

True

False9. A term frequently used to mean interest is: ()

annual percent rate charge

finance charge

carrying charge

both B and C

none of the above 10. The amount of a loan is: ()

the installment price + interest – down payment

installment price – interest – down payment

installment price – interest + down payment

installment price – payments + purchases

none of the above 11. John purchased a new boat for
$24,600.00. He put a $5,400.00 down payment on it. The bank’s loan
was for 60 months. Finance charges totaled $6,400.00. His monthly
payment was: ( )

$106.67

$410.00

$250.00

$426.67

none of the above 12. The formula for ordinary interest using
exact time is: ()

exact days divided by 365

exact days divided by 360

30 divided by 360

30 divided by 365

none of the above 13. The method used to calculate interest
that is sometimes known as the Banker’s Rule is: ()

exact interest using exact time

exact interest using ordinary time

ordinary interest using ordinary time

ordinary interest using exact time

none of the above 14. The proceeds of a $7,500.00, 10% simple
discounted note for 85 days is: (

$7,674.66

$7,322.92

$7,677.08

$7,325.34

none of the above 15. In a non-interest bearing note, the
maturity value is the same as the: ()

proceeds

principal

discount

principal plus interest

none of the above1. The amount of money borrowed or invested
is called the maturity value. ()

True

False

False: maturity value refers to the amount at the end, like a
CD on the expiration date.2. When solving a simple interest
problem, the rate should be written as a decimal number. ()

True

False

True: to avoid a 2 decimal place error.3. 8% for 45 days is
equal to 0.01. ()

True

False

True: .08 x 45 days / 360 = .014. Bank loans and car loans
are examples of open-end loans. ()

True

False

False: open end loans are more like lines of credit,
commercial or construction loans5. The cash price of an item is the
amount you would have paid if the full amount was paid at the time
of purchase. ()

True

False

True: meaning no impact of interest costs.6. The total cost
of an installment purchase is equal to the number of payments times
the amount of each payment minus the down payment. ()

True

…Each of the 15 questions gives a sentence or two of
explanation including calculations, as necessary

Multi choice: interest, amortization, loan, APR, Banker rule

True

False2. When solving a simple interest problem, the rate
should be written as a decimal number. ()

True

False3. 8% for 45 days is equal to 0.01. ()

True

False4. Bank loans and car loans are examples of open-end
loans. ()

True

False5. The cash price of an item is the amount you would
have paid if the full amount was paid at the time of purchase. ()

True

False6. The total cost of an installment purchase is equal to
the number of payments times the amount of each payment minus the
down payment. ()

True

False7. The Truth in Lending Act requires the APR be
accurately stated to the nearest of 1 percent. (s: )

True

False8. The monthly payments are calculated by adding the
finance charge and the amount financed and dividing by the number
of payments in the loan. ()

True

False9. A term frequently used to mean interest is: ()

annual percent rate charge

finance charge

carrying charge

both B and C

none of the above 10. The amount of a loan is: ()

the installment price + interest – down payment

installment price – interest – down payment

installment price – interest + down payment

installment price – payments + purchases

none of the above 11. John purchased a new boat for
$24,600.00. He put a $5,400.00 down payment on it. The bank’s loan
was for 60 months. Finance charges totaled $6,400.00. His monthly
payment was: ( )

$106.67

$410.00

$250.00

$426.67

none of the above 12. The formula for ordinary interest using
exact time is: ()

exact days divided by 365

exact days divided by 360

30 divided by 360

30 divided by 365

none of the above 13. The method used to calculate interest
that is sometimes known as the Banker’s Rule is: ()

exact interest using exact time

exact interest using ordinary time

ordinary interest using ordinary time

ordinary interest using exact time

none of the above 14. The proceeds of a $7,500.00, 10% simple
discounted note for 85 days is: (

$7,674.66

$7,322.92

$7,677.08

$7,325.34

none of the above 15. In a non-interest bearing note, the
maturity value is the same as the: ()

proceeds

principal

discount

principal plus interest

none of the above1. The amount of money borrowed or invested
is called the maturity value. ()

True

False

False: maturity value refers to the amount at the end, like a
CD on the expiration date.2. When solving a simple interest
problem, the rate should be written as a decimal number. ()

True

False

True: to avoid a 2 decimal place error.3. 8% for 45 days is
equal to 0.01. ()

True

False

True: .08 x 45 days / 360 = .014. Bank loans and car loans
are examples of open-end loans. ()

True

False

False: open end loans are more like lines of credit,
commercial or construction loans5. The cash price of an item is the
amount you would have paid if the full amount was paid at the time
of purchase. ()

True

False

True: meaning no impact of interest costs.6. The total cost
of an installment purchase is equal to the number of payments times
the amount of each payment minus the down payment. ()

True

…Each of the 15 questions gives a sentence or two of
explanation including calculations, as necessary