Lesson 9.5 Credit and Interest Quiz answers

1. When a customer buys something with a credit card, the
√ bank
pays the store on the customer’s behalf.

2. The interest rate is based on a percentage of the amount of .
D. money borrowed

3. The annual percentage rate is the interest on a loan paid in .
C. installments

4. A fee paid for using someone else’s money is called .
C. interest

5. Which form of credit imposes a credit limit, is unsecured, is high in interest, and has a bank or financial institution as a lender?
a credit card√

6. When paid interest is stated as a dollar amount it is called .
B. finance charge
7.The amount owed when credit is used is equal to theplus.
D. principal . . . interest

8. Interest allows creditors to be paid for giving up .
D. opportunities

9. Each of the following is included in the amount ultimately paid for borrowing money EXCEPT:
C. annual tax payment

10. Each of the following is a disadvantage of using credit cards EXCEPT:
D. interest free loan if balance is paid off monthly

additional questions if you retake test:

Visa and MasterCard are examples of credit card .
A. brands

The function of interest is to make lending money worthwhile and profitable for the .
A. lender

Which form of credit would most likely have the lowest interest rate?
a mortgage√