finance
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week_3.rarweek 3/FP120_r8_Credit_Protection_and_Identity_Theft_Worksheet.doc
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Title ABC/123 Version X |
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Credit Cards and Identity Theft FP/120 Version 8 |
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University of Phoenix Material
Credit Protection and Identity Theft
Directions
Refer to two articles found at the Federal Trade Commission:
Fair Credit Reporting Act: http://www.consumer.ftc.gov/articles/0155-free-credit-reports
Avoiding Scams: http://www.consumer.ftc.gov/articles/0120-avoiding-scams-101
Provide answers to the following questions based on your readings and your personal experiences. Answers should be 100 to 150 words each.
1. If you find errors on your credit report, what steps would you take to correct them?
The first step is to register a dispute to the credit bureau in writing attaching the copies of documents evident of my claim and in the letter I clearly indicate the information that I do not agree with , secondly raise the issue of the erroneous information with the provider of the information to the credit bureau with attaching the documents proving the error and request them to make correction on the erroneous information with the bureau and any other person they might have supplied the credit report to. Then follow up on the correction of the erroneous information with the bureau by requesting an updated copy of my credit rating and also a copy from the other credit registered credit bureau so as to ensure the correction has been effected to all the necessary entities that may have obtained the erroneous information, if not effected I can go ahead and seek legal redress.
2. There are many organizations that claim they will repair your credit for a fee. From your readings, should someone use a credit repair service? Why or why not? What are some actions these organizations can take that should be a red flag?
It is not advisable to use the credit repair services; most of the company’s that claim to offer this service are just out to make money out of the victim and may not even be able to fix the credit rating as they claim. The actions that may raise the red flag on any such company is whenever such a company insist on the payment for the service before the actual repair is done, other reasons are when they promise to do the repair on the account of a factual information that lead to the low rating that the victim has knowledge of it being true and there is no way they can turn that around. Also when they promise to do the credit repair in a record time, a time that clearly is in achievable in the time frame they are promising i.e repair of a bankruptcy cannot be done overnight.
3. Have you, a family member, or a friend been a victim of identity theft? How did it happen? Describe the resolution process, i.e., how much time did it take, what credit damage was corrected?
Yes, my uncle lost his wallet in a construction site he had the habit of carrying his personal identification document on it, the wallet was picked by a former workmate who used the information to access credit and obtained credit of about $ 5,000, it only occurred to him when he received a lawsuit notice from a credit reporting company claiming that he rented a vehicle and was involved in an accident he caused and disappeared from the scene. The case dragged on for a year until when the identity thief made a mistake of placing an order with the credit card which led to his hide out and on his arrest, the identity was charged for felony and was ordered to pay for the legal process, the damaged car and the $ 5,000.My uncle struggled for a year to have the rating corrected which he eventually did.
4. Using the FTC site, what can you do to minimize the chance of your identity getting stolen?
Request regular updates of credit card statements, bank statements and regularly verifying them in detail, keeping records or memorizing billing dates so as to be able to identify missing bills in time and also notifying the necessary entities on any address change so as to ensure the bills that have personal information do not get to the wrong hands, always destroying any personal documents not in use or unwanted and keeping those that are still in use under lock. Avoid keeping documents that contain personal information in wallets to keep them safe from identity thieves. Requesting at least yearly credit reports from three different credit reporting companies counter checking information that are erroneous.
Post the Credit Protection and Identity Theft worksheet as a Microsoft® Word attachment.
Copyright © XXXX by University of Phoenix. All rights reserved.
Copyright © 2015 by University of Phoenix. All rights reserved.
week 3/FP120_r8_Education_Funding_Worksheet.xls
Sheet1
| 1 | This year's total tuition costs | ||
| 2 | How much of your tuition is currently funded through loans? | ||
| 3 | How much of your tuition is currently funded through personal savings or salary? | ||
| 4 | How much of your tuition is currently funded through scholarships, grants (including Pell Grants), military benefits, employer reimbursement, and/or other sources? | ||
| 5 | Unfunded tuition costs | $0 | |
| These options are best suited to address my unfunded tuition: | $ Covered | ||
| 1 | |||
| 2 | |||
| 3 | |||
| 4 | |||
| 5 | |||
| Total | $0 | ||
| 6 | List at least two ways you could change your educational financial plan in future years | ||
| 7 | How much student loan debt do you expect to have at graduation? | ||
| 8 | What is the average starting salary you expect after graduation? | ||
| 9 | Do your student loans exceed your expected annual starting salary? | NO | |
| 10 | What can you do to reduce the amount you borrow? | Potential | |
| If you do not have any loans, what would you suggest to another student? | Savings | ||
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| 2 | |||
| 3 | |||
| 4 | |||
| Total | $0 | ||
| 11 | What is the standard monthly payment for the total amount you expect to borrow? | ||
| 12 | What other repayment plans could help you lower your monthly payment? |
week 3/FP120_r8_Education_Funding_Worksheet_Instructions.doc
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Education Funding Worksheet Instructions FP/120 Version 8 |
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University of Phoenix Material
Education Funding Worksheet Instructions
You will be completing the Education Funding Worksheet for this assignment. Here are the steps involved and resources to help you find amounts.
The first four questions refer to how you paid tuition and fees this year. If you have your financial aid award letter or a financial plan you created with your advisor, you can refer back to that. Or you can create an educational financial plan by completing steps 1, 2, and 3 in the Tuition and Fees Calculator at www.phoenix.edu/financialplanassignment .
If you are unsure about the amount you borrowed this year, log in to www.nslds.ed.gov to see all your federal student loans. You can also contact your University of Phoenix finance advisor.
After you input lines 1-4, you may see an Unfunded Tuition Cost in line 5. If there is an unfunded amount, you will need to look into other funding options to make up the shortfall.
Questions 6 and 10 might encourage you to look for non-loan funding. These questions are included to get you thinking about other options to pay for college that do not need to be repaid. Research dollars might be available to you. Think about what you learned on iGrad. Another resource is http://www.phoenix.edu/tuition_and_financial_options/financial_options.html .
The next section focuses on loan and repayment. Your goal should be to borrow no more than what you expect your starting salary to be once you leave school. You can look up typical starting salaries for your chosen career at the U.S. Bureau of Labor Statistics website ( www.bls.gov ). Or go to phoenix.edu and check out the Phoenix Career Guidance System.
If your total student loan debt will be more than your anticipated starting annual salary, that may signal trouble when you start repaying your loans. Here are some logical steps you can take to make sure you graduate with manageable student loan debt:
· Commit to spending at least five hours each month looking for and applying for scholarships for the coming year.
· Start saving a small amount now in a separate savings account. Head back to the cash flow statement from Week 1 and see if you can make a few spending tweaks to free up more money for tuition. Could you find $50 more each month to put toward tuition? Every little bit helps to get you on the path to saving.
The challenge is to make sure that you borrow an amount that is manageable. Even good debt can turn bad if you have trouble keeping up with the repayment. If you have additional questions, or would like to discuss options for or changes in your current financial aid plan, contact a University of Phoenix finance advisor.
The last step is to find the standard monthly payment for the amount you expect to borrow. A general rule of thumb based on recent interest rates is that your payment will be $10 for every $1,000 you borrow. For example, if you borrow $10,000 your payment will be approximately $100. To get a more definitive amount, you can log in to this site to use the Repayment Estimator and it will use your NSLDS loan data: https://studentaid.ed.gov/repay-loans/understand/plans .
Copyright © 2015 by University of Phoenix. All rights reserved.
week 3/FP120_r8_Using_Consumer_Credit_Worksheet.doc
University of Phoenix Material
Using Consumer Credit Worksheet
Assignment: Using Consumer Credit Worksheet
Purpose: The Using Consumer Credit Worksheet is designed to test a student’s understanding of credit card interest rates and how to use credit calculations for various purchases.
1. Calculate the following using the Bankrate calculator at:
http://www.bankrate.com/calculators/managing-debt/minimum-payment-calculator.aspx
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Credit Card Balance |
Interest Rate |
Minimum/Fixed Payment |
Number of Months to Pay in Full |
Total Interest Paid |
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$5,000 |
13% |
Minimum |
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$5,000 |
18% |
Minimum |
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$2,000 |
15% |
Fixed $50 |
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$2,000 |
15% |
Fixed $100 |
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· Minimum in this example should be Interest plus 1% of balance, and it will then default to a $15 minimum.
2. When making the minimum payment, how much more interest do you pay when the interest rate is 18% rather than 13%?
3. In the fixed rate example, how much would you save by doubling the fixed payment to $100 a month instead of $50 per month?
4. Assume you have a friend who is making the minimum monthly payments on a credit card. Your friend asks your thoughts on what he is doing. Based on these calculations and what you have learned, how would you advise your friend about making only minimum payments? Your response should be at least 100 words.
5. Calculate the cost of credit using the following formulas. Show your calculations.
Simple Interest: You borrow $2,000 for car repairs. The interest rate is 5%, and you will pay it in full one year later.
Simple Interest on the Declining Balance: You borrow $2,000 for car repairs. The interest rate is 5% and you will make two equal payments over a year (for example, half in January, and half in July)
Answer each of the following questions in 50-100 words each:
6. Grayson just received his credit card statement. He noticed a charge for $40 to a store he has never patronized. What steps should he take to handle this?
7. List the advantages and disadvantages of using credit. Provide at least two of each.
Home Buying
1. Complete the “Buy or Rent” calculator using your own data. In 50-100 words answer the following: What was the recommendation? What were the factors that led to that recommendation? Do you agree or disagree with the recommendation? Why?
2. In a minimum of 100 words, explain the main benefits and drawback of renting and of owning a home?
3. Review Exhibit 7-4 on page 224 of the textbook. In at least 100 words, summarize the steps in the home-buying process.
4. Review Exhibit 7-6 on page 229 of the textbook. Estimate the affordable monthly mortgage payment, the affordable mortgage amount, and the affordable home purchase price for the following situation. Show your calculations.
· Monthly gross income: $2,950
· Other debt, monthly payment: $160
· Down payment to be made: 15% of purchase price
· Monthly property tax and insurance: $210
· 30 year mortgage at 6%
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Enter your calculation and response in this column |
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Step 1: Determine the monthly gross income (annual income divided by 12). |
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Step 2. Multiply step 1 by 33% for a PITI (principal, interest, taxes, and insurance) guideline. NOTE: With a down payment of at least 5% lenders use 33% of gross income as a guide for PITI (principal, interest, taxes, and insurance) |
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Step 3. Subtract other debt payments from the result of Step 2 to determine the Affordable Monthly Mortgage Payment. |
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Step 4. Divide the result of Step 3 by 6.00 (this is the mortgage payment factor from Exhibit 7-7 based on a 30 year loan at 6%) and then multiply this by $1,000. This is the Affordable Mortgage Amount. |
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Step 5. Divide the affordable mortgage amount by .85 (This is 1 minus the down payment percentage) to determine the Affordable Home Purchase. |
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Car Buying
1. Review Exhibit 6-2 on page 196 of the textbook. In at least 100 words, summarize the steps in the car-buying process.
2. Using the framework on page 199, prepare a financial comparison of buying and leasing a car with a cash price of $24,000. Show your calculations.
Instruction: Complete the chart below to calculate the cost of buying a car.
· Down payment (to buy/finance): $4,000
· Monthly loan payment: $560
· 48 month loan and lease
· Value of vehicle at end of loan: $7,200
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Steps to Buying a Car taken from “Figure it Out” on page 199 |
Enter your calculation and response in this column |
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Step 1. Total down payment |
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Step 2. Total cost of payments: Multiply the Monthly Loan Payment by the Length of the Loan |
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Step 3: Identify the opportunity cost of the security deposit: Multiply the Security deposit by the Length of the Loan by 3% |
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Step 4. Add the result of Step 1, 2 and 3. |
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Step 5: To determine the total cost of buying subtract the Value of the vehicle at the end of the loan from the result of Step 4. |
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Instruction: Complete the chart below to calculate the cost of leasing a car.
· Security deposit (to lease): $1,200
· Monthly lease payment: $440
· 48 month loan and lease
· End-of-lease charges: $600
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Steps to Leasing a Car taken from “Figure it Out” on page 199 |
Enter your calculation and response in this column |
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Step 1. Multiply the Monthly Lease Payment by the Length of the Lease |
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Step 2: Identify the opportunity cost of the security deposit: Multiply the Security deposit by the Length of the Lease by 3% |
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Step 3. To determine the total cost of leasing add the results of Step 1 and 2 to the End-of-Lease Charges |
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week 3/How would you describe the different types of student loans.docx
•How would you describe the different types of student loans?
•What did you learn about scholarships that you will now consider?
•How much student loan debt do you feel is reasonable for a recent college graduate?
•What advice would you give to someone considering a private student loan? Why?
Consider the following questions:
•When does loan repayment start?
•What steps can you take now as a student to make repayment manageable when you graduate?
•Which payment plan do you think you will select? Why?
week 3/Week3Quiz.docx
Week 3 Quiz
Instructions: Mark the correct answer by highlighting, bold, or changing the answer to a red font. Save the document as “Your Name Week 3 Quiz” and upload the document to the Week 3 quiz section.
1. Federal student loans can be discharged only under special circumstances. Which of the following would NOT result in loan discharge?
a. Total and permanent disability
b. Partial disability
c. Death
d. Unemployment
2. This type of financial aid typically does not need to be repaid
a. Pell grants
b. Scholarships
c. Employer tuition benefits
d. All of the above
3. Which of the following best describes the Federal Direct PLUS loan?
a. A need-based loan that lets you borrow up to the full cost of tuition, minus any financial aid that you receive
b. A need-based federal loan with a lower, variable rate for those with high credit scores
c. A $5,500 maximum annual loan with a fixed rate of just 3.4%
d. A loan available to people of all income levels that allows a parent or graduate student to borrow up to the full cost of attending college, minus any financial aid received
4. Major factors that affect the affordability of your mortgage include all of the following except
a. Current mortgage rates
b. Income
c. Length of the loan
d. Size of the home
5. Private mortgage insurance
a. Cannot be avoided
b. Is part of all mortgages
c. Is usually required if the down payment is less than 25%
d. Must be terminated automatically when the home owner’s equity reaches 22% of the property value at the time the loan was initiated
6. Trenton wants to buy a house but can provide only a 10% down payment. He probably will be required to have
a. Amortization
b. Escrow
c. Points
d. Private mortgage insurance
7. Which of the following is NOT correct?
a. Renting is usually less expensive in the short run.
b. Home ownership usually has long-term financial advantages.
c. Lifestyle and financial factors should be analyzed to determine if you should rent or buy.
d. Traditional financial guidelines suggest that your home should cost about five times your annual income.
8. All of the following are fixed operating costs for a vehicle except
a. Insurance
b. Interest on an auto loan
c. License and registration
d. Maintenance and repairs
9. The expected value at the end of a lease is called the
a. Invoice price
b. Sticker price
c. Capitalized cost
d. Residual value
10. Many think that perhaps the greatest disadvantage of using credit is
a. The temptation to overspend
b. The convenience offered instead of using cash
c. The float from using credit
d. The increase in total purchasing power
