Personal Financial Literacy

Kim invested $5,000 in a 3-year Certificate of Deposit (CD) that pays 2.3% interest compounded annually. What will the CD be worth at the end of

3 years?

• $5,060.83

• $5,060.83

• $5,060.83

• $5,353.00

Reggie buys a power drill using a payment method that immediately takes the cost of the drill out of his bank account. How did Reggie pay?

• cash

• debit card

• credit card

• gift card

Which payment amount and time period will result in the lowest total loan repayment for a $2,500 loan?

• 24 payments of $122.65

• 12 payments of $226.24

• 9 payments of $296.62

• 18 payments of $157.14

When he was born, Cooper’s grandparents put $2,000 in a college fund. The fund earns interest at 2.1% compounded annually. Yesterday was Cooper’s 18th birthday. How much money is in the account now?

• $2,907.32

• $2,838.96

• $2,756.00

• $2,698.18

Anne takes out an $8,000 loan to buy a car. She chooses the 8-year loan at 9.8% interest, and will pay $120.55 per month. What is the total repayment on the loan?

• $6,272.00

• $9,644.00

• $11,572.80

• $23,145.60

Paul has $2,400 in a savings account earning 3.4% simple interest. How much more interest would he earn in 5 years if the interest were compounded annually?

• $28.70

• $36.70

• $408.00

• $436.70

The table below shows yearly expenses at a state college and at a junior college. How much money would you save if you chose to complete 2 years at Junior College and 2 years at State College, rather than attending all four years at State College?

• $17,109

• $14,312

• $50,354

• You would not save any money at all.

According to the table, how much would it cost to attend State College for four years, if you chose to live at home, rather than pay Room and Board?

• $65,688

• $91,773

• $34,780

• No one would choose to live at home.

A state university charges $8,129 per year for tuition, $7,996 for room and board, $1,150 for books, and $810 for student activity fees. How much would it cost per year for a student who chooses to live at home?

• $40,356

• $18,085

• $17,275

• $10,089

Ian used his credit card to buy all the things he wanted, and now he owes the credit company $7,184 plus 28% interest. After paying his minimum credit card payment and other bills, he has $400 extra left from his paycheck. Which would be the most responsible financial choice for him to make?

• put all the money in a savings account that pays 4.3% compound interest

• treat himself and a friend by buying 2 tickets to a concert

• keep $50 for emergencies and use the rest to pay down his credit card bill

• put $200 in a savings account that pays 3.9% compound interest and go to the concert by himself