Total amount of credit £80, duration of the agreement 29 days, rate of interest 292% per annum (fixed), total amount payable (in one repayment) £98.56. Representative 1281.8% APR.
Given the complexities of modern life, is it right to let children figure out personal finance for themselves and potentially make costly mistakes in the process? Not so says payday loan provider 247Moneybox.com. The firm has been discussing internally about how to promote financial education teaching in schools and the optimum age to convey those messages. A common theme from those discussions is that without a form of assessment, the advice might not quite hit home. So when the company discovered that there was an A-Level equivalent qualification available to sixth-formers, they quickly put together a sample quiz for the staff. The qualification is available from Institute of Financial Services University College, an education charity.
Here is a sample of some of the questions with answers below:
1. You find a credit card available online suggesting it's "interest free" or available for a 0% welcoming offer. How much will shifting your debt from a credit card you currently hold cost?
2. A new institution has recently taken over responsibilities from the "Financial Services Authority". Please select the correct one from below.
3. Case Study: Mr. Jones currently owes £500 to his credit card company from last month and has a direct debit set up to clear the balance. The minimum monthly repayments as agreed are £5, but he only has £490 in his bank account linked to this provider. What charges will he incur if we presume the credit card has a monthly interest rate of 5%?
4. Sharia-compliant banking differs from traditional banking. Please choose one aspect from the answers below that is NOT offered within Islamic banking.
5. A Mortgage Market Review was conducted in 2013. Please select one of the options below that was NOT concluded as a result of it.
6. What has been the cost of mis-sold PPI on the UK banking industry?
7. Name the type of account below that is classed as a "loss leader" account.
8. What constitutes a "sustainable financial product"?
9. Case Study: Mr Davies wishes to buy a holiday home in Portugal securing a mortgage in Euros from a Portuguese bank. The bank offers a mortgage of €100,000 and a monthly repayment rate of €1,000. The exchange rate at the time £1 = €1, however, shortly after the value of the pound rises so that 70p = €1. How much is the new value in pound sterling of Mr Davies's monthly repayment and overall mortgage debt owed?