Chapter 5 Test A

Chapter 5 Test A - Chapter 5 Test 1 Pete and Pam want to...

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Chapter 5 Test 1. Pete and Pam want to purchase a new home but don't know how much mortgage they can qualify for. The lender requires total installment loan payments not exceed 32% of gross monthly income. Based on Pete and Pam's financial data below, what is the maximum monthly mortgage payment for which they can qualify? Monthly Gross Income $5,000 Car payment 400 Student loan payment 300 Current rent payment 1,000 a. $1,700 b. $1,600 c. $ 900 d. $ 600 e. $ 500 2. The type of mortgage that will most likely need to be refinanced is the ____ mortgage. a. fixed-rate b. adjustable-rate c. balloon-payment d. graduated-payment e. growing-equity 3. Variable auto ownership costs are most dependent on a. driver behavior. b. mileage driven. c. city lived in. d. down payment. e. hours driven. 4. The first step in the auto-buying process should be a. test drive several cars. b. begin negotiations. c. consider alternative buying strategies. d. decide whether to trade in your used car or to sell if yourself. e. analyze how much car you can afford. 5. Henry has $2,500 for a down payment and thinks he can afford monthly payments of $400. If he can finance a vehicle with an 8%, 3-year loan, what is the maximum amount Henry can spend on the car? a. $12,765 b. $14,400 c. $14,079 d. $15,265 e. $16,879 6. The down payment on the car you are leasing is called the a. money factor. b. capitalized cost.
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Chapter 5 Test A - Chapter 5 Test 1 Pete and Pam want to...

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