HPF Ch 4-5 Review

Which would you rather have?

• $25 a year ago

• $100 today

• $100 a year from today

If the interest rate is 5%, $100 today is basically equal to ___ one year from now.

• $95

• $100

• $105

• $150

The amount money a person expects to have in the future is called

• Principal
• Future Value
• Simple Interest
• Present Value

Earning interest on interest is called

• Extra Interest
• Simple Interest
• Inflation Interest
• Compound Interest

The idea that money to be paid out or received in the future is not equivalent to money paid out or received today

• SMART Money
• Time Value of Money
• PV/FV Money
• Compound Money

Steady rise in the general level of prices is known as

• Inflation
• Interest
• Time Value of Money
• Principal

Which is MORE important to budget for- needs or wants?

• needs

• wants

Which one of the following is a NEED?

• AirPods

• food

• Netflix

• Hulu

Which of the following are TRUE about gross income and net income?

• Gross income and net income are the same

• Net income is sometimes called "take home pay"

• Gross income is the total amount earned after deductions

• Net income is the total amount earned before deductions

According to a rule of thumb, rent shouldn't take up more than ___ % of your take-home pay.

• 7-12%

• 10-15%

• 15-20%

• 25-30%