The implications of borrowing Unit 2 Topic 11 #valleyifs @ Kahoot

The implications of borrowing No. Question A B C Ans 1 If we cannot afford to pay for an item outright, using a credit card is likely to be a cheaper way of purchasing the item than taking out a personal loan. True False 2 The money to support those with heavy debt problems usually comes from: Central government Local authorities Charities 3 Which of the following loans is the riskiest for someone on a tight budget? A medium term, fixed rate loan A short term, variable rate loan A long term, variable rate loan 4 Which of the following forms of payment encourage people to spend more than they otherwise might? Cash Debit card Credit card 5 If a credit card has an annual rate of interest of 18%, how much is the monthly interest rate charged? [2]

Answers No. Question A B C 1 If we cannot afford to pay for an item outright, using a credit card is likely to be a cheaper way of purchasing the item than taking out a personal loan. True False 2 The money to support those with heavy debt problems usually comes from: Central government Local authorities Charities 3 Which of the following loans is the riskiest for someone on a tight budget? A medium term, fixed rate loan A short term, variable rate loan A long term, variable rate loan 4 Which of the following forms of payment encourage people to spend more than they otherwise might? Cash Debit card Credit card 5 If a credit card has an annual rate of interest of 18%, how much is the monthly interest rate charged? [2] Marks awarded as stated below 18% divided by 12 months [1] 1.5% [1]

Task Using the information to the right and a calculator, work out the answers to the questions. 5 minutes

Task Go to the IFS website and take a look at the topic test for topic 11 to further revision the main points. Make revision materials. 10 minutes

Key Terms for Topic 11 Assets Bankruptcy Order Consumer Borrowing County Court Judgement Credit Reference Agencies Debt Consolidation Debt Relief Order Individual voluntary arrangement Insolvency Payment Default Recession On your whiteboards or books, write down a definitions for these key terms. EXT: Can you give examples of each? 10 minutes

Answers Credit reference agencies – companies that collect data on the conduct of people’s financial accounts. Insolvency – when an individual’s debts exceed their assets and they cannot meet the loan repayments on the debt; they are said to be ‘insolvent’. Assets – personal possessions and investments that have a value if sold Bankruptcy order – a court order to recover debts from an insolvent person, under the supervision of a trustee in bankruptcy. Debt relief order – an arrangement for someone with debts not exceeding £20,000, limited assets and little disposable income to write off the debts after 12 months. Payment default – when the borrower fails to make payments on a credit agreement. Consumer borrowing – borrowing by members of the public rather than the government Recession – a period of at least six months when the amount of goods and services that a country is producing is shrinking. This has wide-scale negative effects on the economy. Debt consolidation – rolling up existing debts into one new loan Individual voluntary arrangement (IVA) – an agreement between a debtor and their creditors to pay some of the debts over a set term, usually five years. County court judgment (CCJ) – a court order for the repayment of a debt.

GCSE IFS Finance – Unit 2 Topic 11 Search for #valleyifs GCSE IFS Finance – Unit 2 Topic 11