College and Career Readiness II Term Exam #2

Front

What is a general rule of thumb on how much you should save? Options: 5% of your income, 10% of your income, 20% of your income, 30% of your income

Back

20% of your income

Front

What is a 529 account?

Back

A tax exempt fund that lets your savings grow for school.

Front

About how much should you save in an emergency fund? Options: 1-3 months of living expenses, 3-6 months of living expenses, 6-9 months of living expenses, 9-12 months of living expenses

Back

3-6 months of living expenses

Front

What is a good strategy to help you save? Options: spend money on all expenses; put the rest into saving, Tap into your savings on a regular basis to purchase small items, like snacks, Pay yourself first - set aside money for savings each month, Keep your spending and saving money together in 1 account

Back

Pay yourself first - set aside money for savings each month

Front

What is a reason for why so many Americans live paycheck-to-paycheck?

Back

Many people impulse shop

Front

How is compound interest different than simple interest?

Back

It is simple interest + interest earned on that interest.

Front

Assuming a rate of growth of 8%, in how many years will your $ double?

Back

9 years

Front

At what rate does your $ need to grow in order to double in 18 years? Options: 2%, 4%, 6%, 8%

Back

4%

Front

Saving accounts differ from checking accounts in that...

Back

Money in a saving account can be used to fund a bank's loans.

Front

How does inflation impact the money in your savings account?

Back

The purchasing power of your money decreases over time.