UGBA 135 FINAL EXAM STUDYGUIDE QUESTIONS AND CORRECT ANSWERS
Question:
1. What's the rule of 72?
Answer:
How long it takes for a sum of money to double at a given interest rate 72/interest rate = # of
years to double OR 72/# of years to double = interest rate
Question:
2. What's a general partner?
Answer:
A general partner has the authority to act on behalf of the business without the knowledge or
permission of the other partners. Unlike a limited or silent partner, the general partner may have
unlimited liability for the debts of the business.
Question:
3. T/F f you start a business a lender will want you to personally gaurantee a loan i.e. a home
Answer:
True
Question:
4. what's the first thing you need to start a business?
Answer:
An idea
Question:
5. what's part A of medicare?
Answer:
Part A medicare is free to seniors who apply and is financed by a 2.9%payroll tax on all earned
income paid by all workers with no salary cap. In effect, 1.45% is paid by the worker and 1.45% is
paid by the employee
Question:
6. Part B?
Answer:
Part B of medicare is optional and means tested. It is financed by monthly premiums paid by the
insured which currently range from about to $134 to $428 per month, based on a person's prior
year's adjusted gross income. Is it paid directly or deducted from Social Security checks. Parts A,
B, and D have deductibles.
Question:
7. Part D? benefits available for social security and medicare?
Answer:
,Part D of medicare is optional and means tested. It is a prescription drug plan currently provided
only by private insurance companies and financed 25% by monthly premiums from the insured
and 75% by taxes. B & D are means tested which means your income must be low enough to
quslify for the program
Question:
8. Are social security and unemployment benefits taxable income?
Answer:
yes
Question:
9. what's the most important thing when determining your credit score?
Answer:
Paying bills on time over time
Question:
10. what are late fees and how do you avoid them?
Answer:
Pay your shit on time. payment late on minimum credit card payment: can't be greater than your
minimum payment
Question:
11. If you are the victim of credit card theft, what 's the first thing you should do?
Answer:
contact Transunion, Experian, and Equifax
Question:
12. If you borrow money carrying a balance and you make an extra payment mum where do
you want the extra money to go?
Answer:
to the credit card with the highest interest
Question:
13. what is a prepaid card?
Answer:
Prepaid cards are offered by banks and non banks. They are not linked to a bank account.
Prepaid cards were initially designed to provide less the affluent, those without a bank account,
to carry money. However, bnks have found that they can be quite lucrative as they may charge
initiation fees, inactivity fees, fees to load money onto the card, fees if you do NOT load money
onto the card, fees to check balane info, fees to use an atm for cash, and fees for using a check
to close an account.
Question:
14. What is variable rate of interest?
, Answer:
A variable rate of interest is an interest rate that moves up and down based upon a benchmark
interest rate which is not controlled by the lender. It is now commonly used by credit card issues.
It is now commonly used by the credit card issuers. One example would be to base the variable
rate on the "prime rate" of interest which is supposesdly the lowest interest rate banks charge
their best customers.
Question:
15. What is a go-to rate?
Answer:
A go-to rate is an interest rate you are charged on unpaid credit card balances, in additon to the
variable rate, to determine the total rate of interest on your account. Your go-to rate is based on
your credit history. As your credit card history improvesor declines, so is the likelihood that your
go-to-rate will rise or fall on future borrowings. For examples, if your go-to-rate is 8% and the
variable rate is 3% your total rate of interest o unpaid balances is 11%. If interest rates rise and
the variable rate increases to 5% your total rate of interest will rise to 13%.
Question:
16. What is the minimium crirteria for a credit score?
Answer:
At least one reported "account" which has been open for at least six months. At least one report
that has been reported by a lender in the last six months and nothing that indicates you're
deceased.
Question:
17. need to be collected about you before you get a score?
Answer:
Debt-tocerdit ratio Length of credit history New accounts and recent applications for credit Mix of
credit cards and loans
Question:
18. Whats the legal limit on interest?
Answer:
There is none
Question:
19. If you pay your credit card balance completely every month does it lower your credit
score?
Answer:
no
Question:
20. Do CC companies track your student loan payments?
Answer:
yes
Question:
1. What's the rule of 72?
Answer:
How long it takes for a sum of money to double at a given interest rate 72/interest rate = # of
years to double OR 72/# of years to double = interest rate
Question:
2. What's a general partner?
Answer:
A general partner has the authority to act on behalf of the business without the knowledge or
permission of the other partners. Unlike a limited or silent partner, the general partner may have
unlimited liability for the debts of the business.
Question:
3. T/F f you start a business a lender will want you to personally gaurantee a loan i.e. a home
Answer:
True
Question:
4. what's the first thing you need to start a business?
Answer:
An idea
Question:
5. what's part A of medicare?
Answer:
Part A medicare is free to seniors who apply and is financed by a 2.9%payroll tax on all earned
income paid by all workers with no salary cap. In effect, 1.45% is paid by the worker and 1.45% is
paid by the employee
Question:
6. Part B?
Answer:
Part B of medicare is optional and means tested. It is financed by monthly premiums paid by the
insured which currently range from about to $134 to $428 per month, based on a person's prior
year's adjusted gross income. Is it paid directly or deducted from Social Security checks. Parts A,
B, and D have deductibles.
Question:
7. Part D? benefits available for social security and medicare?
Answer:
,Part D of medicare is optional and means tested. It is a prescription drug plan currently provided
only by private insurance companies and financed 25% by monthly premiums from the insured
and 75% by taxes. B & D are means tested which means your income must be low enough to
quslify for the program
Question:
8. Are social security and unemployment benefits taxable income?
Answer:
yes
Question:
9. what's the most important thing when determining your credit score?
Answer:
Paying bills on time over time
Question:
10. what are late fees and how do you avoid them?
Answer:
Pay your shit on time. payment late on minimum credit card payment: can't be greater than your
minimum payment
Question:
11. If you are the victim of credit card theft, what 's the first thing you should do?
Answer:
contact Transunion, Experian, and Equifax
Question:
12. If you borrow money carrying a balance and you make an extra payment mum where do
you want the extra money to go?
Answer:
to the credit card with the highest interest
Question:
13. what is a prepaid card?
Answer:
Prepaid cards are offered by banks and non banks. They are not linked to a bank account.
Prepaid cards were initially designed to provide less the affluent, those without a bank account,
to carry money. However, bnks have found that they can be quite lucrative as they may charge
initiation fees, inactivity fees, fees to load money onto the card, fees if you do NOT load money
onto the card, fees to check balane info, fees to use an atm for cash, and fees for using a check
to close an account.
Question:
14. What is variable rate of interest?
, Answer:
A variable rate of interest is an interest rate that moves up and down based upon a benchmark
interest rate which is not controlled by the lender. It is now commonly used by credit card issues.
It is now commonly used by the credit card issuers. One example would be to base the variable
rate on the "prime rate" of interest which is supposesdly the lowest interest rate banks charge
their best customers.
Question:
15. What is a go-to rate?
Answer:
A go-to rate is an interest rate you are charged on unpaid credit card balances, in additon to the
variable rate, to determine the total rate of interest on your account. Your go-to rate is based on
your credit history. As your credit card history improvesor declines, so is the likelihood that your
go-to-rate will rise or fall on future borrowings. For examples, if your go-to-rate is 8% and the
variable rate is 3% your total rate of interest o unpaid balances is 11%. If interest rates rise and
the variable rate increases to 5% your total rate of interest will rise to 13%.
Question:
16. What is the minimium crirteria for a credit score?
Answer:
At least one reported "account" which has been open for at least six months. At least one report
that has been reported by a lender in the last six months and nothing that indicates you're
deceased.
Question:
17. need to be collected about you before you get a score?
Answer:
Debt-tocerdit ratio Length of credit history New accounts and recent applications for credit Mix of
credit cards and loans
Question:
18. Whats the legal limit on interest?
Answer:
There is none
Question:
19. If you pay your credit card balance completely every month does it lower your credit
score?
Answer:
no
Question:
20. Do CC companies track your student loan payments?
Answer:
yes
