Financial Literacy 7.13

Front

What is net worth?

Back

Net worth is the difference between total assets and total liabilities. It represents the value of an individual's financial position.

Front

How do you calculate net worth?

Back

Net worth = Total Assets - Total Liabilities.

Front

What is the formula for calculating simple interest?

Back

Simple Interest = Principal x Rate x Time.

Front

If you invest $500 at an interest rate of 5% for 5 years, how much interest will you earn?

Back

You will earn $125 in interest.

Front

What is a variable expense?

Back

A variable expense is a cost that can change from month to month, such as an electricity bill.

Front

What is a fixed expense?

Back

A fixed expense is a cost that remains the same each month, such as a car payment or mortgage.

Front

What is sales tax?

Back

Sales tax is a percentage of the sale price added to the cost of goods and services.

Front

If a camera costs $175 and the sales tax is 7.2%, what is the total cost?

Back

The total cost of the camera is $187.60.

Front

What is principal in finance?

Back

Principal is the original sum of money borrowed or invested, excluding any interest or profits.

Front

What does the term 'interest rate' mean?

Back

The interest rate is the percentage charged on a loan or paid on an investment over a specific period.