LATEST2024 HR Block Budget ChallengeUpdated Exam

When asked "How much should I borrow in student loans?" the CFPB (Consumer Financial Protection Bureau) said this. A.) With loan consolidation more affordable than ever, borrow as much as you can get approved for B.) try not to accumulate more total student debt than you expect to earn as a starting annual salary when you leave school C.) borrow as much money for college as you need as long as you are sure about your major and career D.) None of the answers. The CFPB is not involved with financial matters. - ANSWER- B.) Try not to accumulate more total student debt than you expect to earn as a starting annual salary when you leave school Which of the following types of financial assistance does not need to be paid back? A.) Subsidized Loan B.) Unsubsidized Loan C.) Grant D.) Private Loan E.) None of the answers are correct - ANSWER- C.) Grant What is the likely impact of filing bankruptcy on a student loan? A.) The loan repayment schedule will be adjusted longer B.) The loan repayment amount will be adjusted lower C.) The loan amount will stay the same, but the balance will stop accruing interest D.) None of the answers are correct - ANSWER- D.) None of the answers are correct Which of the following financial packages has the lowest total cost to the student? A.) 50% academic scholarship, 50% subsidized loans B.) 25% academic scholarship, 50% Grants, 25% subsidized loans C.) 25% athletic scholarship, 25% Grants, 50% subsidized loans - ANSWER- B.) 25% academic scholarship, 50% Grants, 25% subsidized loans Why is a subsidized student loan more advantageous than a non-subsidized loan? A.) This is not true. Subsidized loans do not provide any advantages over non- subsidized loans. B.) Subsidized loans usually have lower interest rates C.) Subsidized loans usually have a period of time after graduation where payments are not required. D.) Subsidized loans do not have to be paid back E.) Subsidized loans usually have lower interest rates and a period of time after graduation where payments are not required - ANSWER- E.) Subsidized loans usually have lower interest rates and a period of time after graduation where payments are not required Which event will have the greatest impact (positive or negative) on one's net worth after one month? A.) Buy a new car at market value for $15,000. Car depreciates 20% upon transfer of ownership. B.) Buy a used car at market value for $15,000 C.) Lease a $15,000 car on a 3 year lease. The monthly payment is $199 and all lease payments are required in the lease. D.) None of these events will impact the net worth of an individual - ANSWER- C.) Lease a $15,000 car on a 3 year lease. The monthly payment is $199 and all lease payments are required in the lease. If a home mortgage has a term of 15 years and a payment of $1,000, what is the loan amount? (assume that there are no interest-free mortgages) A.) $180,000 B.) Less than $180,000 C.) $200,000 D.) $360,000 - ANSWER- B.) Less than $180,000 If a home buyer puts 20% down on a $200,000 house and uses a mortgage to borrow the rest, how much will the mortgage be (excluding any closing costs)? A.) $160,000 B.) $200,000 C.) $180,000 D.) $240,000 - ANSWER- A.) $160,000 Which of the following will increase your net worth the most? A.) Purchase of house valued at $150,000 with $25,000 down and a mortgage of $125,000 B.) Purchase a used car valued at $7,000 with an Auto Loan for $7,000 C.) Sell a bike valued at $75 for $75 cash D.) All of these increase net worth E.) None of these increase net worth - ANSWER- E.) None of these increase net worth Sub-prime lending rates are 1) __________ than prime lending rates and are for people with 2)__________ credit. A.) 1) lower 2) good, B.) 2) higher 2) good C.) 1) lower 2) poor D.) 1) higher 2) poor - ANSWER- D.) 1) higher 2) poor Which loan type isn't secured with collateral? A.) Mortgages (home loans) B.) Subsidized student loans C.) Auto loans D.) Small business loans E.) All of the answers are correct F.) None of the answers are correct - ANSWER- B.) Subsidized student loans Which are tax deductible? A.) Community service hours B.) Student loan payments C.) Medical Bills totaling $200 D.) 401k gains E.) None of the answers are correct F.) All of the answers are correct - ANSWER- E.) None of the answers are correct Select what would happen to your 1) taxable income and 2) tax liability when you are able to claim a deduction such as student loan interest? A.) 1) lower 2) lower B.) 1) higher 2) higher C.) 1) higher 2) lower D.) 1) lower 2) higher - ANSWER- A.) 1) lower 2) lower John earned $2,500 as a life guard over the summer. This was his only job and income taxes were deducted from his paychecks by his employer. For filing a tax return, what should John do? A.) John should not file a tax return. John is legally not required to file because his income is less than the minimum requirement for filing. B.) John should file a tax return. He can then get all of his taxed money refunded. C.) John should report this income on his parents tax return since he is still living at home. D.) John should send a check for $50 to the IRS in case the employer didn't take out enough taxes. - ANSWER- B.) John should file a tax return. He can then get all of his taxed money refunded.