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Financial Literacy Exam #2 Questions with Latest Update
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  • Financial Literacy
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  • Financial Literacy

If you get a mortgage, the following expenses will likely be put in "ESCROW" each month - so be prepared for this! (check all that apply) - Answer-Homeowners Insurance Real Estate Tax Financing is a marketing technique used for large purchases. It can benefit you because you pay less interest a...

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  • October 12, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • financial literacy exam 2 questions with latest u
  • if you get a mortgage the following expenses will

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  • Financial Literacy
  • Financial Literacy

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Financial Literacy Exam #2 Questions
with Latest Update
If you get a mortgage, the following expenses will likely be put in "ESCROW" each
month - so be prepared for this! (check all that apply) - Answer-Homeowners Insurance
Real Estate Tax

Financing is a marketing technique used for large purchases. It can benefit you because
you pay less interest and bring down the total cost of the item. - Answer-False

Insurance on a leased car is lower because you don't really own the car. The leasing
company does. - Answer-False

Once you pay for your car, the only additional expense is fuel and insurance. - Answer-
False

An offer to purchase all new furniture at 0% interest for 12 months is a good idea
because you don't have to pay it all off at once. - Answer-False

To determine affordability when purchasing a car, you should (check all that apply) -
Answer-Find a reliable car that will fit your needs.
Be sure you have saved up enough cash to pay for it.

Eleanor and Eric are buying their first home. They have spent the last 3 years paying off
all their debt, they have a fully-funded emergency fund, they have saved enough to put
20% down (to avoid PMI). Both of them have solid, full-time careers. What mortgage
option would you suggest to them: - Answer-20% down, 15-year Fixed

When you purchase a car, it is more important to consider what monthly payment you
can afford rather than the price of the car. - Answer-False

When you lease a car, the following are some fees that you might be responsible for.
Check all that apply: - Answer-Mileage overage fees.
Additional wear and tear.
Early termination fees.

When considering whether to rent or purchase a home, which of the following are
benefits to renting: (check all that apply) - Answer-Little or no maintenance costs
Flexibility

I can pay my taxes every other year if I can't afford them. The IRS won't mind. - Answer-
False

, The following are possible tax deductions - check all that apply: - Answer-Property
Taxes
Medical and Dental Expenses
Mortgage Interest

You can refuse to pay federal income tax because you don't agree with the federal
budget and do not want to support some of the government's initiatives. - Answer-False

Reagan is a 24 year old, single, and lives in an apartment. He has no dependents. Last
year he earned $50,000 as a professor teaching history. He also earned $150 in interest
income from his money market account. He paid $300 in student loan interest. He
deposited $100 a month ($1200) into his tax deferred 401K. He also contributed to his
ROTH account (which is not a tax advantaged account, but growth is not taxed). He
decides to take the standard deduction. He had no tax credits. Calculate his Gross
income, Adjusted Gross income, and taxable income. - Answer-Reagan's gross income
is $50,150; his AGI is $48,650; his taxable income is $36,100

Based on the 2021 tax brackets, If Brian and his wife have a taxable income of $70,000
and they receive a $7200 child credit (because they have 2 children under the age of 5),
what is their total income tax liability? - Answer-$802

There are four major categories of taxes. Check all that apply: - Answer-Wealth Tax
(often called death tax)
Property Tax
Sales Tax on purchases
Tax on earnings

Itemizing your deductions on a tax return is always better than simply applying the
standard deduction. - Answer-False

Jonathan had $3000 withheld for taxes last year. After filling out the appropriate forms
with the IRS, his total tax liability turned out to be $2800. Consequently, Jonathan
overpaid by $200 and will receive a refund from the IRS. What if Jonathan's tax liability
turned out to be $3500? - Answer-Jonathan would owe the IRS $500 and may want to
adjust his W4 withholding.

Taxable Income - Answer-net amount of income, after allowable deductions, on which
income tax is computed

Earned Income - Answer-money received for personal effort, such as wages & salary

investment income - Answer-money recieved in form of dividents, interest, etc.

AGI - Answer-gross income reduced by certain adjustments, such as contributions to an
IRA or alimony payments

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