Study Questions 4

Lesson 1 (3. 0 points) 1. What is credit? (0. 5 points) The ability to obtain goods or services before payment, based on the trust that payment will be made in the future: â€Å"unlimited credit†. | | | 2. What is a credit score? (0. 5 points) Your credit score is a three-digit number generated by a mathematical algorithm using information in your credit report 3. What is installment credit? (0. 5 points) a loan repaid with interest in equal periodic payments. 4. What is revolving credit? (0. 5 points) Credit that is automatically renewed as debts are paid off. . What is noninstallment credit? (0. 5 points) Non-installment credit refer to a system of credit that is payable in one lump-sum amount by a specified date 6. Name at least one section of a credit report. (0. 5 points) lenders Lesson 2 (3. 0 points) 1. Name at least one of the steps in establishing credit. (0. 5 points) Incorporate your business. 2. Name at least one alternate option to establishing credit if you are u nable to get a credit card yet. (0. 5 points) Get a secured credit card. 3. What is debt services default? 0. 5 points) When an individual, company or sovereign nation borrows money, there are usually legal obligations that have been set out in a debt contract 4. What is the Better Business Bureau? (0. 5 points) A Better Business Bureau (BBB) is a private, nonprofit organization that provides services and programs to assist consumers and businesses 5. What is a debt settlement program? (0. 5 points) is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. 1] 6. What is bankruptcy? (0. 5 points) The state of being bankrupt: â€Å"many companies were facing bankruptcy†; â€Å"bankruptcy proceedings†. Lesson 3 (3. 0 points) 1. What is an annual percentage rate? (0. 5 points) the rate, for a payment period, multiplied by the number of payment periods in a year. 2. What is an annual percentage yie ld? (0. 5 points) The effective annual rate of return taking into account the effect of compounding interest. APY is calculated by 3. Name at least one advantage of credit cards. 0. 5 points) Offer free use of funds, provided you always pay your balance in full, on time 4. Name at least one disadvantage of credit cards. (0. 5 points) Cost much more than other forms of credit, such as a line of credit or a personal loan, if you don't pay on time. 5. If you take out a $1,000 loan for college at 7% interest, what is the principal? (0. 5 points) $1000 6. What is a loan? (0. 5 points) A thing that is borrowed, esp. a sum of money that is expected to be paid back with interest.