ALLIED FIN202 MODULE 3 HOMEWORK ASSIGNMENT

Welcome to the Module 3 Homework Assignment for FIN 202: Personal Finance.This section prepares you to complete this assignment successfully. Please follow these instructions to complete and submit this assignment.You will create a document in either a .doc or .rtf format to record and save your work. If you have never created documents in an .rtf format, please visit the Academic Resource Center and click on Tutorials. You will then see a list of tutorials on the following page. Click on RTF Tutorial.Read the instructions carefully and review your work before you submit your assignment.Include a title page with this assignment. Your title page should follow standard APA formatting. Please view the .allied.edu/Pages/ViewPage.aspx?GroupID=189″>Title Page Example.When you are ready to submit the assignment, click the Start button at the bottom of the page to access the submission page and follow the instructions.

PART I
Directions:
Using Microsoft® Word to save and submit your work, please provide
detailed and elaborate responses to the following questions. Your responses should include examples from
the reading assignments.

1.
Define consumer credit and explain its
advantages and disadvantages.
2.
What are the two general rules of
measuring credit capacity?
3.
A friend comes to you for advice about
improving his or her credit score. What
advice would you give to this friend? Make
sure to include the five steps for improving your credit score.
4.
What are two key concepts to keep in
mind as you shop for credit?
5.
Explain the Rule of 78s.
6.
Explain choices available in declaring
bankruptcy.
7.
What are the two basic types of credit? Give examples of both.
8.
What are the three most common types of
closed-end credit?
9.
What is revolving check credit?
10. How
can you protect yourself against debit/credit card fraud?
11. What
are a few things to consider before you cosign a loan?
12. In
what ways can you lower the risk to your lender in order to reduce your
borrowing costs?
13. Explain
the concept of “float.”
14. Explain
simple interest.
15. What
can you do if you are unable to meet your credit obligations?
16. In
open-end credit, what are the various systems creditors use to calculate the
balance on which they assess finance charges?
17. What
are the various methods used to calculate interest?

PART II

Progress Problem
(continuation from Module 2)
Obtaining Credit (p. 210)

Life Situation

Financial Data

Single

Monthly
Income: $1,750

Age:
23

Living
Expenses: $1,210

No
dependents

Personal
Property: $7,300

Graduate
and Engaged

Savings:
$5,000

Student
Loan: $4,200

Credit
Card Debt: $4,600

Shelby
has now been out of college for about a year and has continued to work at the
pet store full time. She recently got
engaged to Mark Lawrence. After the last
year of saving, she now has an adequate emergency fund. However, in the last year, she and Mark both
have used credit cards to make many of their purchases. They used cards (they each have several) when
they ran out of money near the end of each month. They also used credit to fund a vacation to
the beach. Shelby justified the trip and
many of her purchases because both of the cards she uses have rewards
programs. Both Shelby and Mark almost
always make their payments on time, but have been unable to pay off more than
the minimum balance every month, leaving them with credit card debt. Shelby and Mark would like to get married
soon and possibly even buy a condo, but are not sure how to finance these
things while also starting Shelby’s Pet Salon.

Directions:Write
a 1-page, double-spaced paper in 12 pt. font answering the following
questions. Please use APA format.

1. Given her current situation, list
some suggestions on how Shelby can reduce her credit card debt.
2. What is the best way for Shelby
and Mark to become more aware of the effect of credit card debt on their
current and long-term financial situation?