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  1. How much would a homeowner receive with actual cash-value coverage and replacement cost coverage for a three-year old flat screen TV destroyed by a leak in the roof? The flat screen TV would cost $1,869 to replace today; it cost $3,700 three-years ago, and has an estimated life of 9 years.
  2. Tony wants a new car set for his wife. He figures the car will cost $17,500. The dealership will finance for 5 years at a 13.75 percent interest rate. Assuming Tony accepts the store’s financing, how much will he save in total interest if he places a down payment to $2,500?
  3. Harriett has a $50,000 whole life insurance policy with $10,000 of cash value. She decides to borrow $5,000 against the policy. If she dies before repaying the remaining $3,000 of the loan, how much would her beneficiary receive?
  4. You have personal property coverage with a $500 limit on currency, a $5,000 limit on jewelry, and a $2,500 limit on gold, silver, and pewter. You do not have a personal property floater. If $300 cash, $4,750 of jewelry, and $3,500 of gold and silver were stolen from your home, what amount of loss would be covered by your homeowner’s policy? If your deductible is $1,000, how much will you receive on your claim?
  5. You would like to purchase a 4-wheeler. A local store is advertising 4-wheelers for $4,649. In-store financing is available at 2.5 percent or you can choose not to renew your $5,000 certificate of deposit (CD), which just matured. The advertised CD renewal rate is 2 percent. You know the in-store financing costs will not affect your taxes, but you will pay taxes (27 percent federal and 6.75 percent state) on the CD interest earnings. Should you cash the CD or use the in-store financing?
  6. Sue has split-limit 50/100/25 automobile liability insurance. Several months ago Sue was in an accident in which she was found to be at fault. Two passengers were seriously injured and were awarded $35,000 each because of Sue’s negligence. How much of this judgment will Sue’s insurance policy cover? What amount will Sue have to pay out-of-pocket?
  7. Calculate how much money a prospective homeowner would need for closing costs on a house that costs $92,000. Calculate based on a 20% down payment, 3 discount points on the loan, a 1-point origination fee, and $1,750 in miscellaneous other fees.
  8. Calculate the monthly payments for a $92,000 mortgage loaned in each of the following ways.

30 year fixed at 5.5 percent
15 year fixed at 5.5 percent
20 year fixed at 5.5 percent

  1. John has split-limit 25/50/10 auto insurance coverage on his 2007 Honda Fit. Driving home from work, he hits another car, slides across median and damages the crossing light. Damage to the other car and crossing light was $6,700, $3,750 respectively. How much will John’s insurance company pay?
  2. Your mortgage statement shows a total payment of $1,440.05 with $1,238.45 paid toward principal and interest and $201.60 paid for taxes and insurance. Taxes and insurance for 3 months were collected at closing. Now after 9 months of payments, you are curious about the total in your escrow account. Calculate the amount.
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