1) When people borrow money, they have to pay back: a) What they borrowed + interest b) What they borrowed c) What they borrowed + interest + any fees charged 2) Which of the following items are you most likely to buy using credit? a) A music album b) A motorcycle c) Your weekly shopping 3) With a personal loan, each monthly repayment is the same. a) True b) False 4) How often is interest charged on overdrafts? a) Every day b) Once a week c) Once a month 5) When you use a credit card, you are charged interest: a) if you pay off all the credit for the month b) if you pay off some of the credit for the month c) however much credit you pay off 6) There are normally no age restrictions to borrow from an organisation offering credit. a) True b) False 7) Lenders do not have to state the APR when advertising a loan. a) True b) False 8) What type of APR ensures that loan repayments will be the same amount every month? a) Fixed APR b) Variable APR 9) Why do some people end up owing payday lenders a lot of money? a) They receive threats to make them pay more money b) A payday loan is a form of interest-free credit c) The APR is huge and people pay a lot in interest if they miss a repayment 10) What is the danger with interest-free credit that lasts for a limited time? a) No APR is stated by the lender b) The interest rate will rise, so you need to know when the interest-free period ends c) The interest rate will fall, so you need to know when the interest-free period ends

Unit 1 Topic 5 Quiz

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