UNIT 3 REVIEW FINANCIAL LITERACY

Front

What is Financial Literacy?

Back

Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.

Front

What is the formula for Simple Interest?

Back

Front

What is Compound Interest?

Back

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Front

How do you calculate the total amount in an account with compound interest?

Back

Front

What is the difference between Simple Interest and Compound Interest?

Back

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest that has already been added.

Front

If you invest $10,000 at an interest rate of 2.5% compounded annually for 8 years, what is the total amount?

Back

The total amount after 8 years is $12,184.03.

Front

How do you find the interest earned on an investment?

Back

The interest earned can be found by subtracting the principal from the total amount: Interest = Total Amount - Principal.

Front

What is the interest earned on an investment of $10,000 at 2.5% compounded annually for 8 years?

Back

The interest earned is $2,184.03.

Front

What does 'compounded annually' mean?

Back

Compounded annually means that the interest is calculated and added to the principal once a year.

Front

What is a financial advisor?

Back

A financial advisor is a professional who provides financial services and advice to clients, helping them manage their finances and investments.