Personal Finance: Unit 1 Review

Compound Interest Calculator (open from your bookmarks)

Jose is investing $15,000 in the stock market for the next 25 years. His average returns are 8%. He doe NOT contribute anything monthly.

How much will this be worth in 25 years?

• Roughly $20,000

• Roughly $38,000

• Roughly $43,000

• Roughly $103,000

Compound Interest Calculator

Krista invested $10,000 into a 401K over the last 20 years. Her work/employer matched her contribution. She averaged 8% in interest.

How much is her 401k worth now?

• $25,000 (roughly)

• $47,000 (roughly)

• $93,000 (roughly)

• $61,000 (roughly)

You put $500 into a CD with an interest rate of 2.3 for 5 years. How much is your short term investment worth at the end of the 5 years?

Step 1: Interest = P X R X T

Step 2: Interest + Principal

• $607

• $557.50

• $835.50

• $450

If you deposit $400 into a CD (certificate of deposit) with an interest rate of 3% for 3 years, how much simple interest will you earn after THREE years?

P X R X T

• $45

• $36

• $8

• $26

What is the difference between a CD and a Savings Account?

• A savings account earns a super high interest rate

• A CD is locked for a specific period of time with FEES to take out $ early

• A CD is a primary retirement savings vehicle

• You can have a debit card with a savings account

You need $1,000 minimum to open a savings account

• TRUE

• FALSE

You can open a savings account when you are 17 without an adult.

• TRUE

• FALSE

Which savings vehicle earns the highest interest if untouched for a long period of time?

• CD

• Savings account

• Money Market Account

• 401K / IRA

If I need a truck & trailer NOW to continue my lawn mowing business, what's my best option?

• Get a small loan and try to get the best interest rate

• Use the sinking fund savings method and give up mowing for this season

• Borrow money from your uncle at 50% interest

• None of these options

Which of the following is an opportunity cost associated with attending college?

• working a 40+ hour job and saving up to pay for a down payment on a house

• obtaining a degree to assist with future job applications

• having access to networking opportunities on your college campus

• access to advanced projects and academics in your field of study