How to Build a Debt Payoff Plan With AI Quiz

Answers and explanations appear as you take the quiz.

1. With debts of $600 at 18%, $5,000 at 27% and $3,000 at 11%, which one does the avalanche method target first?
   • The $600 store card
   • The $3,000 personal loan
   • The $5,000 card at 27%
   • Whichever has the highest minimum payment
2. Using the same three debts, what is the snowball payoff order?
   • $600, then $3,000, then $5,000
   • $5,000, then $600, then $3,000
   • $3,000, then $600, then $5,000
   • $5,000, then $3,000, then $600
3. With the same total monthly payment, why does the avalanche never cost more interest than the snowball?
   • It skips minimum payments on the other debts
   • It lowers the lenders' interest rates
   • It pays debts in alphabetical order
   • It sends extra money to the balance charging the highest rate first
4. What does rolling a payment mean in both the snowball and the avalanche?
   • Moving a debt onto a new card
   • Adding a paid-off debt's full payment to the next target debt
   • Skipping a month and paying double later
   • Combining all debts into one loan
5. Why ask the AI to build a spreadsheet with formulas instead of typing out the schedule?
   • Spreadsheets lower your interest rate
   • Lenders require formulas
   • Language models can make arithmetic errors, and formulas can be checked and changed
   • Typed tables cannot show dates
6. Which detail might an AI plan miss because balances and rates alone don't reveal it?
   • The nickname of each debt
   • Whether a promotional rate carries deferred interest
   • How many debts you have
   • Your total monthly budget
7. Which information is appropriate to give a chatbot when building a payoff plan?
   • Balances, rates and minimums labeled with nicknames
   • Full account numbers
   • Your online banking passwords
   • Your Social Security number
8. If your minimum payments already exceed what you can afford, what does the guide suggest?
   • Switch from the snowball to the avalanche
   • Ask the AI for a longer schedule
   • Stop paying the smallest debt
   • Talk with a nonprofit credit counselor about options such as a debt management plan