# Objective Type Business Questions

November 10, 2010 Leave a comment

**Objective Type Business Questions**

**1.** The amount of money borrowed or invested is called the maturity value.

True

False

**2.** When solving a simple interest problem, the rate should be written as a decimal number.

True

False

**3.** The interest paid on a $10,000.00 loan for 2 years at 13.5% interest is $1,250.00.

True

False

**4.** The formula to find the rate is interest divided by (principal times time).

True

False

**5.** 8% for 45 days is equal to 0.01.

True

False

**6.** The cash price of an item is the amount you would have paid if the full amount was paid at the time of purchase.

True

False

**7.** The total cost of an installment purchase is equal to the number of payments times the amount of each payment minus the down payment.

True

False

**8.** The Truth in Lending Act requires the APR be accurately stated to the nearest of 1 percent.

True

False

**9.** The monthly payments are calculated by adding the finance charge and the amount financed and dividing by the number of payments in the loan.

True

False

**10.** The amount of a loan is:

the installment price + interest – down payment

installment price – interest – down payment

installment price – interest + down payment

installment price – payments + purchases

none of the above

**11.** John purchased a new boat for $24,600.00. He put a $5,400.00 down payment on it. The bank’s loan was for 60 months. Finance charges totaled $6,400.00. His monthly payment was:

$106.67

$410.00

$250.00

$426.67

none of the above

**12.** A fraction that shows what portion of the total finance charge has not been paid at the time a loan is paid off is called the:

finance rebate

refund fraction

pay-off ratio

constant ratio

none of the above

**13.** The formula for ordinary interest using exact time is:

exact days divided by 365

exact days divided by 360

30 divided by 360

30 divided by 365

none of the above

**14.** The proceeds of a $7,500.00, 10% simple discounted note for 85 days is:

$7,674.66

$7,322.92

$7,677.08

$7,325.34

none of the above

**15.** In a non-interest bearing note, the maturity value is the same as the:

proceeds

principal

discount

principal plus interest

none of the above

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