Credit - Credit Rating Education Done In Time!
This quiz is a supplementary to https://www. Creditgogetter. Info, an informational website containing basic knowledge on personal credit and finance for high school students.
- 1.
If the balance of your credit card is $10,000, the bank charges you with a 17% interest rate, and the minimum payment is 4% of the outstanding balance, how much interest will you be charged in total if you only pay the required minimum payment every month before you pay off?
- A.
$3,064
- B.
$5,915
- C.
$5,407
- D.
$3,859
- E.
$5,420
Correct Answer
C. $5,407Explanation
If the balance of your credit card is $10,000 and the bank charges you with a 17% interest rate, the minimum payment would be 4% of the outstanding balance, which is $400. By only paying the minimum payment every month, the remaining balance would accrue interest. The interest charged each month would be 17% of the remaining balance. Therefore, the interest charged in total can be calculated by summing up the interest charged each month until the balance is paid off. In this case, the total interest charged would be $5,407.Rate this question:
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- 2.
A good budget should be very tight; therefore, you can take good control of your money and spend your money more efficiently.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
A good budget should not necessarily be very tight. While having a tight budget can help control spending and promote efficiency, it is not the only factor that determines a good budget. A good budget should be balanced, realistic, and tailored to individual financial goals and circumstances. It should allow for necessary expenses, savings, and some flexibility for unexpected situations. Therefore, the statement that a good budget should be very tight is false.Rate this question:
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- 3.
The Canadian Government established plans such as the Canada Pension Plan and Old Age Security that will provide sufficient retirement income for retirees. These retirees do not need to further supplement their retirement income in order to live an ideal lifestyle.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The statement is false because while the Canadian Government has established plans like the Canada Pension Plan and Old Age Security, these plans may not provide sufficient retirement income for all retirees to live an ideal lifestyle. Many retirees may need to supplement their retirement income through personal savings, investments, or other sources in order to maintain their desired lifestyle during retirement.Rate this question:
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- 4.
If John Smith made monthly contributions of $100 towards his TFSA starting in August 2009, what is his total allowable contribution at the beginning of January 2010?
- A.
$5,000
- B.
$500
- C.
$9,500
- D.
$10,000
- E.
$100
Correct Answer
C. $9,500Explanation
The Tax-Free Savings Account (TFSA) was introduced in Canada in 2009. From 2009 to 2012, the annual contribution limit was $5,000. Since John started contributing in August 2009, he would have contributed for a total of 5 months in 2009 (August to December). Therefore, his total contribution for 2009 would be $500 (5 months x $100). In January 2010, the contribution limit for 2010 would be added, which is $5,000. So, his total allowable contribution at the beginning of January 2010 would be $9,500 ($500 + $5,000 + $4,000).Rate this question:
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- 5.
Phishing is?
- A.
A typing of fishing technique.
- B.
A virus that can steal private information from a PC.
- C.
A new social networking technology that promotes the use of fake identity to protect its users.
- D.
A process in which a fraudulent website or communication acting as a legitimate entity attempting to acquire private information from its users.
- E.
An email that provides a link to a legitimate website, asking you to confirm your personal information.
Correct Answer
D. A process in which a fraudulent website or communication acting as a legitimate entity attempting to acquire private information from its users.Explanation
Phishing is a process in which a fraudulent website or communication pretends to be a legitimate entity in order to deceive users into providing their private information. This can include personal details such as passwords, credit card numbers, or social security numbers. The intention is to use this information for malicious purposes, such as identity theft or financial fraud.Rate this question:
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- 6.
Which of the following is NOT a recommended method to reduce the chances of identity theft?
- A.
Protect your computer with Anti-virus and Firewall software.
- B.
Shred any junk mail that has your name and address.
- C.
Give your personal information to only trusted sources.
- D.
Delete your Facebook, Twitter, and MySpace account.
- E.
Be suspicious of websites that ask you for personal information.
Correct Answer
D. Delete your Facebook, Twitter, and MySpace account.Explanation
Deleting your Facebook, Twitter, and MySpace account is not a recommended method to reduce the chances of identity theft. While it may reduce the amount of personal information available online, it does not eliminate the risk entirely. Identity theft can still occur through other means, such as data breaches or phishing attacks. It is important to take additional measures, such as protecting your computer with antivirus and firewall software, shredding junk mail, being cautious of websites that ask for personal information, and only giving your personal information to trusted sources.Rate this question:
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- 7.
As long as I keep my spending to any amounts within my credit limit and pay all my bills in full by the due date, my credit scores will be fine.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
This statement is false because while keeping spending within the credit limit and paying bills on time are important factors in maintaining a good credit score, they are not the only factors. Other factors such as the length of credit history, types of credit used, and credit utilization ratio also play a role in determining credit scores. Therefore, simply following these two practices may not guarantee that credit scores will be fine.Rate this question:
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- 8.
What are the 3 most important factors that will influence your credit score?
- A.
Your spending history, whether you have declared bankruptcy, and the amount of your outstanding credit balances.
- B.
Your marital status, your payment history, and the amount of your outstanding credit balances.
- C.
Your payment history, whether you have declared bankruptcy, and the amount of your outstanding credit balances.
- D.
Your outstanding balances history, your payment history, and the number of credit cards you have.
- E.
Your marital status, the number of credit cards you have and whether you have declared bankruptcy.
Correct Answer
C. Your payment history, whether you have declared bankruptcy, and the amount of your outstanding credit balances.Explanation
The three most important factors that will influence your credit score are your payment history, whether you have declared bankruptcy, and the amount of your outstanding credit balances. These factors are crucial in determining your creditworthiness and financial responsibility. Your payment history reflects how consistently and timely you make your payments, while bankruptcy indicates a significant financial setback. The amount of your outstanding credit balances shows your level of debt and how well you manage it. These factors are used by credit bureaus to assess your creditworthiness and determine the risk of lending to you.Rate this question:
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- 9.
Which of these is not true of leasing?
- A.
Lower monthly payments
- B.
Different dealers may have different rates
- C.
Credit history is irrelevant
- D.
Rates and terms are negotiable
- E.
You may return the car at the end of the lease term
Correct Answer
C. Credit history is irrelevantExplanation
Your credit score generally determines the interest rate of your lease or finance on the vehicle. Many deals also avoid dealing with borrowers who had been bankrupted.Rate this question:
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- 10.
When does repayment of a student loan generally start?
- A.
Six months after the loan has been cashed
- B.
On the end date of study on your loan documents
- C.
Not until end of study is declared
- D.
Seven months after study end date
- E.
Never
Correct Answer
D. Seven months after study end dateExplanation
Student loans repayments start after the grace period stated on your loan documents which is generally six to seven months after your study end dateRate this question:
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- 11.
Which is the most suitable bank account for students without credit cards?
- A.
Savings account
- B.
Chequing account
- C.
Tax free savings account
- D.
Investment account
- E.
TFSA account
Correct Answer
B. Chequing accountExplanation
Chequing accounts have higher transaction limits that allow you to make purchases and withdrawals without paying extra fees. This would be most suitable for students who do not yet have a credit card and generally pays with cash and debit.Rate this question:
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Current Version
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Mar 20, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 14, 2010Quiz Created by
Creditgogetter
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