Quiz about Dave Ramsey Savings Unit Test

Question 1

When it comes to saving money, the amount you save is determined by how much you have left at the end of the month once all of your spending is done.

Accepted Answer

False

Answer

True

Question 2

The five steps to financial success.

Accepted Answer

Five Foundations

Answer

Five Money Myths

Question 3

At your age, a fully funded emergency fund should be:

Accepted Answer

$500

Answer

$5,000

Answer

$100

Answer

$1,100

Question 4

Which of the following steps is the First Foundation?

Accepted Answer

save a $500 emergency fund

Answer

Get out of debt

Answer

build wealth and give

Answer

pay cash for your car

Question 5

The first thing you should save for is your retirement fund.

Accepted Answer

false

Answer

true

Question 6

Instead of borrowing money for large purchases, you should set money aside in a _________ over time and pay with cash.

Accepted Answer

sinking fund

Answer

emergency fund

Answer

credit card fund

Answer

mortgage fund

Question 7

Saving money over time for a large purchase.

Accepted Answer

Sinking Fund

Answer

Installment Fund

Question 8

Save a $500 emergency fund.

Accepted Answer

The First Foundation

Answer

The Fourth Foundation

Question 9

What does it mean to have a negative savings rate?

Accepted Answer

Spending more money than you make and acquiring death

Answer

Saving for something that is a want instead of a need

Answer

Having a fully funded emergency fund

Answer

Having no savings at all

Question 10

Which of these is not a key to saving money?

Accepted Answer

Your income

Answer

Focus

Answer

Making saving a habit and a priority

Answer

Discipline

Question 11

Interest paid on interest previously earned.

Accepted Answer

Compound Interest

Answer

Interest

Question 12

Americans typically maintain a very high savings rate.

Accepted Answer

False

Answer

True

Question 13

You should save money for three basic reasons: emergency fund, purchases and wealth building.

Accepted Answer

True

Answer

False

Question 14

Why should interest earned not be a factor with your emergency fund?

Accepted Answer

The emergency fund is not intended to grow wealth

Answer

Inflation can eat up the interest earned

Answer

Interest-bearing accounts at banks earn a high rate of interest, therefore, interest is not a concern

Answer

None of the above

Question 15

Which of the following is not a reason your emergency fund should be kept in a separate savings account away from your spending money?

Accepted Answer

So that your emergency fund savings can earn a lot of interest.

Answer

So that you do not get your spending and saving money confused.

Answer

So that it is clear what money is only to be used for emergencies.

Answer

So that it is not too easy to access.

Question 16

You should hold off on investing for retirement until you have college or other post-secondary education paid for.

Accepted Answer

True

Answer

False

Question 17

You should keep your emergency fund in the same account as your spending money.

Accepted Answer

False

Answer

True

Question 18

The saving habits of Ben and Arthur best illustrate which principle of saving?

Accepted Answer

The length of time money is invested matters.

Answer

The amount of the initial investment is the key.

Answer

Rate of return doesn't matter.

Answer

None of the above.

Question 19

When a person intentionally invests money in a place where it can earn more money.

Accepted Answer

Wealth Building

Answer

Sinking Fund

Question 20

Saving money over time for a large purchase

Accepted Answer

Sinking Fund

Answer

Savings Account

Answer

Checking Account

Answer

Interest Bearing Account

Question 21

Calculate the simple interest for this problem. $1,000 at 6% interest for 3 Years.

Accepted Answer

$1,191.02

Answer

$969.39

Answer

$1,180.00

Answer

$1,881.60

Question 22

When you convert the interest rate of 3.5% into a decimal, you would get?

Accepted Answer

.035

Answer

3.5

Answer

350

Answer

.35

Question 23

The simple interest formula is I=Prt.  What does the t represent?

Accepted Answer

Time

Answer

Principle

Answer

Interest

Answer

Percent Rate

Question 24

The simple interest formula is I=Prt.  The P represents the principle.  The principle is ___________________.

Accepted Answer

the amount of money borrowed or deposited

Answer

the percent interest for his year

Answer

the amount taxed

Answer

the amount the bank owes you for being a customer at their bank

Question 25

Emilio borrows $1200 from a bank with 8% simple interest per year.  How much will he have to pay back total in 2 years?

Accepted Answer

$1392

Answer

$150

Answer

$192

Answer

$1350

Question 26

Caiden earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 year?

Accepted Answer

$831.10

Answer

$827.52

Answer

$839.45

Answer

$846.80

Question 27

Steve deposited

$5,000 in a savings account that pays 4% interest compounded annually. Which

equation could be used to find the value of the account after 3 years?

Accepted Answer

A = 5,000(1 + 0.04)³

Answer

A = 5,000(1 + 4)³

Answer

A = 5,000(1 + 0.4) x 3

Answer

A = 5,000(0.04)³

Question 28

Riley invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total will Riley earn in 15 years?

Accepted Answer

$2,706.86

Answer

$1,584.62

Answer

$2,651.39

Answer

$1,825.10

Question 29

Principal: $5000

Interest Rate: 3.75%

Time: 25 years

Compounded Monthly

State the future account balance.

Accepted Answer

$12,749.30

Answer

$12712.31

Answer

$12,657.59

Answer

$12550.84

Question 30

Bruno was given $2000 when he turned 3 years old. His parents invested it at a 2% interest rate compounded annually. No deposits or withdrawls were made. Which expression can be used to determine how much money Bruno had in the account when he turned 16?

Accepted Answer

2000(1+0.02)¹³

Answer

2000(1-0.02)¹³

Answer

2000(1+0.02)¹⁶

Answer

2000(1-0.02)¹⁶

Question 31

Find the simple interest:
Principal: $6,000
Interest Rate: 5%
Time: 6 months

Accepted Answer

$150

Answer

$1,800

Answer

$1,500

Answer

$15,000

Question 32

Credit cards and car loans are a GREAT idea for most people.

Accepted Answer

False

Answer

True

Question 33

The average student loan debt is about

Accepted Answer

$30,000

Answer

$12,000

Answer

$18,000

Answer

$6,000

Question 34

Personal finance is ____% behavior and ____% knowledge.

Accepted Answer

80, 20

Answer

50, 50

Question 35

The reason debt has become a problem in America is because

Accepted Answer

loaning money became profitable for banks and other businesses

Answer

Americans are forced to get loans.

Question 36

We are told that debt is normal. It has become acceptable in or culture to use credit to buy ___________________.

Accepted Answer

EVERYTHING

Answer

Clothes

Answer

Jewelry

Answer

Food

Question 37

Who profits from interest on credit card debt?

Accepted Answer

Credit card companies

Answer

People using credit cards

Question 38

Personal financial success is primarily the result of:

Accepted Answer

Managing your money behavior

Answer

Winning the lottery

Answer

Generous welfare and unemployment programs

Answer

Inheriting money from your relatives

Question 39

Which of the following is not a true statement:

Accepted Answer

The credit industry in America has not changed much since 1917

Answer

Americans learned to borrow during post WWII prosperity

Answer

After 1970, consumer debt skyrocketed

Answer

As banks made profits, they lent more money to consumers

Question 40

Learning the language of money is not important because you will be able to depend on others

Accepted Answer

False

Answer

True

Answer

Maybe

Answer

I do not know

Question 41

Write .506 as a percent.

Accepted Answer

50.6%

Answer

5.06%

Answer

506%

Answer

500.6%

Question 42

What is 20% written in decimal form?

Accepted Answer

.2

Answer

2.0

Answer

20.

Answer

.02

Question 43

What is the Percent equivalent to .84?

Accepted Answer

84%

Answer

84/100

Answer

65%

Answer

3%

Question 44

What is the Decimal equivalent to 56/100?

Accepted Answer

.56

Answer

56%

Answer

.85

Answer

.100

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