18.1 And 18.2 Quiz

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| By Jenna Cabral
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Jenna Cabral
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Quizzes Created: 1 | Total Attempts: 147
Questions: 20 | Attempts: 147

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• 1.

Which of the following situations describes the use of an ATM?

• A.

Abby purchased an item and paid for it when the bill came in the mail.

• B.

Abby wrote out an amount for an item and gave it to a cashier.

• C.

Abby entered a PIN to begin a transaction and received an amount of cash.

• D.

Abby balanced her checkbook.

C. Abby entered a PIN to begin a transaction and received an amount of cash.
Explanation
The correct answer is Abby entered a PIN to begin a transaction and received an amount of cash. This describes the use of an ATM because Abby is using a Personal Identification Number (PIN) to initiate a transaction and withdraw cash from the machine. The other options do not involve the use of an ATM. Abby purchasing an item and paying for it when the bill comes in the mail suggests a traditional payment method, Abby writing out an amount for an item and giving it to a cashier suggests a cash payment, and Abby balancing her checkbook suggests managing her finances but not necessarily using an ATM.

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• 2.

Devin's bank charges \$1.75 for nonbank ATM withdrawals and \$0.30 for each debit card transaction. Last month, Devin paid \$8.25 in ATM and debit card fees. He made 3 nonbank ATM withdrawals. How many times did he use his debit card?

• A.

2

• B.

5

• C.

7

• D.

10

D. 10
Explanation
Devin paid \$1.75 for each nonbank ATM withdrawal, so the total amount he paid for nonbank ATM withdrawals is 3 * \$1.75 = \$5.25. The remaining amount of \$8.25 - \$5.25 = \$3 is the total amount he paid for debit card transactions. Since each debit card transaction costs \$0.30, Devin made \$3 / \$0.30 = 10 debit card transactions.

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• 3.

Which of the following can have a positive effect on your credit score?

• A.

Owing more money than you earn.

• B.

• C.

• D.

Having a lot of debt.

C. Paying your bills on time.
Explanation
Paying your bills on time can have a positive effect on your credit score because it demonstrates responsible financial behavior. Timely bill payments show that you are reliable and capable of managing your debts. This can increase your creditworthiness in the eyes of lenders, making it easier for you to obtain credit in the future. On the other hand, owing more money than you earn, losing your job, and having a lot of debt can all negatively impact your credit score as they indicate financial instability and an increased risk of defaulting on payments.

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• 4.

Which of the following can have a negative effect on your credit score?

• A.

• B.

• C.

Having a job.

• D.

Getting a raise.

B. Maxing your credit card out.
Explanation
Maxing out your credit card can have a negative effect on your credit score because it indicates a high credit utilization ratio, which is the amount of credit you are using compared to your total available credit. A high credit utilization ratio suggests that you are relying heavily on credit and may be at a higher risk of not being able to repay your debts. This can lower your credit score as it reflects poor financial management and increases the perceived risk for lenders.

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• 5.

It is important to check your credit report regularly.

• A.

True

• B.

False

A. True
Explanation
Regularly checking your credit report is important because it allows you to monitor your financial history and ensure its accuracy. By reviewing your credit report, you can identify any errors or discrepancies that could potentially harm your credit score or indicate fraudulent activity. Additionally, checking your credit report helps you stay informed about your overall credit health and can provide insights into areas where you can improve your financial management. This proactive approach allows you to address any issues promptly and maintain good credit standing.

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• 6.

• A.

True

• B.

False

B. False
Explanation
Taking a loan from your uncle will not help build your credit. Credit bureaus typically do not consider loans from family members or friends when calculating credit scores. To build credit, it is important to have a diverse credit history, including loans and credit accounts from reputable financial institutions.

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• 7.

520 is a excellent credit score.

• A.

True

• B.

False

B. False
Explanation
A credit score of 520 is generally considered to be a poor or below average credit score. It indicates a higher risk for lenders and may result in difficulties in obtaining credit or loans. Therefore, the statement that 520 is an excellent credit score is false.

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• 8.

The better credit you have, the more likely a bank will give you a loan.

• A.

True

• B.

False

A. True
Explanation
Having a better credit score increases the likelihood of a bank granting a loan. This is because a good credit score indicates that the borrower has a history of repaying debts on time and managing their finances responsibly. Banks consider this as a positive factor when assessing the risk associated with lending money. Therefore, it is true that the better credit an individual has, the more likely they are to be approved for a loan by a bank.

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• 9.

Whitney and Jonathan each take out a \$15,000 loan for a new car. Each has to repay the loan in 4 years. Whitney will pay an interest rate of 3% per year. Her monthly payments will be \$332.01. Because Jonathan has a lower credit score, he will have to pay an interest rate of 3.5% per year. His monthly payments will be \$335.34. How much will Whitney repay the lender in 4 years? DO NOT PUT A COMMA IN YOUR ANSWER!

\$15936.48, 15936.48
Explanation
Whitney will repay the lender a total of \$15,936.48 over the course of 4 years. This can be calculated by multiplying her monthly payment of \$332.01 by the number of months in 4 years (48 months).

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• 10.

How much will Jonathan repay the lender in 4 years? DO NOT PUT A COMMA IN YOUR ANSWER!

\$16096.32, 16096.32
Explanation
Jonathan will repay the lender a total of \$16096.32 in 4 years.

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• 11.

How much more will a \$15,000 loan cost Jonathan than it will cost Whitney

\$159.84, 159.84
Explanation
Jonathan and Whitney will both have to pay \$159.84 as the cost of the loan. Therefore, the answer is \$159.84, 159.84.

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• 12.

Charlie has a checking account at Transnational Bank. In December he wrote 4 checks and made 3 debit card transactions. Would Charlie’s monthly fee be cheaper if his account were at First City Bank, Transnational Bank, or Hometown Bank?

• A.

First City Bank

• B.

Transnational Bank

• C.

Hometown Bank

A. First City Bank
Explanation
The question provides information about Charlie's banking activities in December, but it does not provide any specific details about the monthly fees charged by each bank. Therefore, it is not possible to determine which bank would have a cheaper monthly fee based solely on the given information.

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• 13.

How much in fees would Charlie pay at First City Bank?

\$0.75, \$.75, 0.75, .75
Explanation
Charlie would pay \$0.75 in fees at First City Bank.

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• 14.

How much in fees would Charlie pay at Transnational Bank?

\$5.75, 5.75
Explanation
Charlie would pay \$5.75 in fees at Transnational Bank.

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• 15.

How much in fees would Charlie pay at Hometown Bank?

\$2.00, \$2, 2.00, 2
Explanation
Charlie would pay \$2.00, \$2, 2.00, or 2 in fees at Hometown Bank.

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• 16.

How many years does information stay on your credit history?

• A.

10 years

• B.

5 years

• C.

Forever

• D.

7 years

D. 7 years
Explanation
Information stays on your credit history for 7 years. This means that any negative information, such as late payments or defaults, will remain on your credit report for that period of time. Positive information, such as on-time payments and responsible credit use, will also be recorded and stay on your credit history for 7 years. After this time, the information will typically be removed from your credit report.

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• 17.

What should you do if you notice something wrong on your credit report?

• A.

Cry.

• B.

Call the credit company.

• C.

Do nothing, the credit company will know to fix it.

• D.

Ignore it, it doesn't affect your credit.

B. Call the credit company.
Explanation
If you notice something wrong on your credit report, the best course of action is to call the credit company. They are the ones responsible for maintaining accurate and up-to-date information on your credit report. By contacting them, you can report the error and request that it be corrected. Ignoring the issue or assuming that the credit company will fix it on their own is not advisable, as it may negatively impact your credit score and financial standing.

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• 18.

What is not on your credit report?

• A.

Employment.

• B.

• C.

Social Security number.

• D.

Hair color.