FIN 2100 MIDTERM EXAM QUESTIONS
AND ANSWERS ALL CORRECT
A common financial risk of home ownership is that:
A. interest rates may change with a conventional mortgage.
B. property values may decrease.
C. mortgage interest is not tax deductible.
D. only a portion of real estate taxes are tax deductible - Answer- B
The amount of mortgage a person is eligible for would be increased by:
A. higher interest rates.
B. a lower down payment.
C. high debt obligations.
D. a low family income.
E. lower interest rates. - Answer- E
Calculate the payment on a 30-year, $575,000 mortgage at 6%:
A. $3,275.46
B. $3,447.42
C. $3,273.56
D. $20,687.88 - Answer- B
You intend to purchase a house valued at $575,000. You plan to make a 15% down
payment and take out a 30 year mortgage on the remaining balance. If the mortgage
has a
6% rate, what will be the monthly payment:
A. $2,930.30
B. $3,275.46
C. $3,447.42
D. $3,102.67 - Answer- A
Which of the following would increase the speed of equity growth for a homebuyer?
A. making a down payment of 10 percent instead of 20 percent
B. obtaining a mortgage interest rate of 9 percent instead of 8 percent
C. obtaining a 15-year mortgage instead of a 30-year mortgage
D. making larger deposits to the escrow account - Answer- C
Todd Foley is applying for a $100,000 mortgage. He can get a $800 monthly payment
for
principal and interest and no points, or a $700 monthly payment with 3 points? How
, many months will it take Todd to cover the cost of the discount points if he takes the
lower monthly payment?
A. 6
B. 10
C. 18
D. 30
E. 48 - Answer- D
A renter is required to pay a security deposit of $800, on which 4 percent interest will be
paid. What amount would the person earn each year?
A. $100
B. $64
C. $32
D. $16
E. $4 - Answer- C
If closing costs of $1,400 are associated with the refinance of a mortgage that would
reduce the monthly payment from $980 to $870 refinance, it would take approximately
____ months to cover these costs.
A. 6
B. 9
C. 13
D. 17
E. 22 - Answer- C
Over your lifetime ___ of your earning will be sent on consumer purchases - Answer-
60% - 70%
What are the corporate procurement practices? - Answer- - corporate purchasing
department
- control over who spends money
- quality standards
- competitive bidding
- vendor performance evaluation
What is the difference between needing something and wanting something? - Answer- -
do I really need the new iPhone 17 or do I want it
what are some shifts in consumer buying? - Answer- smaller business are going out of
business because they are getting replaced but bigger stores
mediation - Answer- it is voluntary and court ordered
arbitration - Answer- it is binding, you pick one the other group picks one and then u
pick one together and then whatever happens its the result you can't go back to court
AND ANSWERS ALL CORRECT
A common financial risk of home ownership is that:
A. interest rates may change with a conventional mortgage.
B. property values may decrease.
C. mortgage interest is not tax deductible.
D. only a portion of real estate taxes are tax deductible - Answer- B
The amount of mortgage a person is eligible for would be increased by:
A. higher interest rates.
B. a lower down payment.
C. high debt obligations.
D. a low family income.
E. lower interest rates. - Answer- E
Calculate the payment on a 30-year, $575,000 mortgage at 6%:
A. $3,275.46
B. $3,447.42
C. $3,273.56
D. $20,687.88 - Answer- B
You intend to purchase a house valued at $575,000. You plan to make a 15% down
payment and take out a 30 year mortgage on the remaining balance. If the mortgage
has a
6% rate, what will be the monthly payment:
A. $2,930.30
B. $3,275.46
C. $3,447.42
D. $3,102.67 - Answer- A
Which of the following would increase the speed of equity growth for a homebuyer?
A. making a down payment of 10 percent instead of 20 percent
B. obtaining a mortgage interest rate of 9 percent instead of 8 percent
C. obtaining a 15-year mortgage instead of a 30-year mortgage
D. making larger deposits to the escrow account - Answer- C
Todd Foley is applying for a $100,000 mortgage. He can get a $800 monthly payment
for
principal and interest and no points, or a $700 monthly payment with 3 points? How
, many months will it take Todd to cover the cost of the discount points if he takes the
lower monthly payment?
A. 6
B. 10
C. 18
D. 30
E. 48 - Answer- D
A renter is required to pay a security deposit of $800, on which 4 percent interest will be
paid. What amount would the person earn each year?
A. $100
B. $64
C. $32
D. $16
E. $4 - Answer- C
If closing costs of $1,400 are associated with the refinance of a mortgage that would
reduce the monthly payment from $980 to $870 refinance, it would take approximately
____ months to cover these costs.
A. 6
B. 9
C. 13
D. 17
E. 22 - Answer- C
Over your lifetime ___ of your earning will be sent on consumer purchases - Answer-
60% - 70%
What are the corporate procurement practices? - Answer- - corporate purchasing
department
- control over who spends money
- quality standards
- competitive bidding
- vendor performance evaluation
What is the difference between needing something and wanting something? - Answer- -
do I really need the new iPhone 17 or do I want it
what are some shifts in consumer buying? - Answer- smaller business are going out of
business because they are getting replaced but bigger stores
mediation - Answer- it is voluntary and court ordered
arbitration - Answer- it is binding, you pick one the other group picks one and then u
pick one together and then whatever happens its the result you can't go back to court
