Unit 1 Financial Literacy Quiz

Hannah invested $35,000 in a mutual fund that earns 6% interest per year compounded annually. To the nearest dollar, how much was her investment worth after 3 years?

Tags

CCSS.HSF-LE.A.1C

How do the returns for simple interest and compound interest compare for the same principal and interest rate?

• The returns are the same for every year since the principal and rate are the same.

• The returns are the same for the first year, but then the returns are greater for compound interest every year after.

• The returns are the same for the first year, but then the returns are greater for simple interest every year after.

• The return for compound interest is higher than for simple interest for every year.

Frank has four different options from which to choose for college.

• College A costs $12,000 per year in tuition and offers him an academic scholarship of $3,000 per year. He would have to live on campus, with room and board costing him another $7,000 per year.

• College B costs $15,000 per year in tuition but is located close to home, so he would not have to pay for any room or board. College B does not offer any scholarships.

• College C costs $25,000 per year and offers him both an academic scholarship for $9,000 per year and an athletic scholarship of $10,000 per year. College C would cost Frank an additional $8,400 per year in room and board.

• College D costs $21,000 per year in tuition. Room and board would cost an additional $9,300 per year. College D is offering Frank a $2,000 academic scholarship.

Which college would cost Frank the least to attend?

• College A

• College B

• College C

• College D

Al invests $250 in a savings account that earns 2.5% simple interest annually. If he does NOT make any additional deposits or withdrawals, how much money will be in the savings account after 2 years?

• $6.25

• $12.50

• $256.25

• $262.50

Tags

CCSS.7.RP.A.3

Katie deposited $2,000 into a new savings account that paid interest at an annual rate of 3%, compounded continuously. If there were no other transactions, approximately how much money was in Katie’s account 6 years after she made the deposit?

• $2,360

• $2,388

• $2,394

• $3,600

Jenny has $400 in an account with an annual interest rate of 6% compounded annually. If Jenny makes no deposits or withdrawals, how much money will be in her account at the end of 3 years?

• $424.00

• $466.67

• $472.00

• $476.41

Tags

CCSS.HSF-LE.A.1C

Tamara invested $15,000 in an account that pays ​​​​​​​4% annual simple interest. Tamara will not make any additional deposits or withdrawals. How much interest will Tamara earn on her investment at the end of ​​​​​​​3 years?

• $1,800

• $600

• $450

• $1873

Tags

CCSS.7.RP.A.3

Nicolas has $650 to deposit into two different savings accounts.

-- Nicolas will deposit ​​​​​​​$400 into Account I, which earns ​​​​​​​3.5% annual simple interest.

-- He will deposit $​​​​​​​250 into Account II, which earns interest compounded annually.

Nicolas will not make any additional deposits or withdrawals. Which amount is closest to the total balance of these two accounts at the end of ​​​​​​​2 years?

• $672.13

• $695.00

• $694.25

• $694.51

Mr. Turner invested $8,000 in an account for his daughter’s college education. The account pays 5% interest, compounded yearly. How much money will Mr. Turner have in the account after 4 years, to the nearest dollar?

Julia's family wants to save for her four-year college education. After some research, they estimate that the total cost for a state school will be about $72,000. They have saved $50,000 so far, and Julia is 14 years old. If her family saves $250 a month for the next 4 years, how much money will Julia need in financial aid to pay for her education?

• $7,500 per year

• $7,500 for all 4 years

• $10,000 per year

• $10,000 for all 4 years