Personal Finance Unit 1b Review

Which is generally a true statement about the relationship between education and a person’s earning power?

• The more education the lower the income
• The more education the higher the income
• The less education the higher the income

Money in an emergency fund should be used to pay for:

• Items that suddenly go on sale
• Large expenses such as a house or college education
• Long-term investments such as stocks
• Necessary expenses when a person loses a job or is unable to work because of illness or injury

Emily’s car is worth approximately $5,300 but she still owes $1,600 on her loan. She also has $800 in a savings account. What is Emily’s net worth?

• $7,700
• $2,900
• $4,500
• $6,100

Jamal makes $9 per hour and works 15 hours a week. He also gets a $25 per week allowance. What is Jamal’s annual gross income? [Hint: there are 52 weeks in a year]

• $8,320
• $190
• $9,000
• $2,548

You have a car worth $3,200. You owe $1,400 on the loan. You also owe $320 on a credit card. How much are your total liabilities?

• $4,920
• $1,480
• $3,200
• $1,720

Assume you took $2,500 in cash out of your savings account and bought a car worth $2,500. How much did your net worth change?

• +$2,500
• $0 (didn’t change)
• -$2,500
• $5,000

A person can increases his net worth by:

• Buying a new car with a loan
• Making purchases with a credit or debit card
• Increasing assets and/or decreasing liabilities
• Transferring money from a savings account to a checking account

Echo wants to put a $1,000 down payment on a car 10 weeks from now. She works about 10 hours per week at her current job. She brings home $8 an hour after taxes are withdrawn from her check. Is it possible for her to save the $1,000 if she has no other expenses?

• No, she will not make more than $1,000 in the next 10 weeks
• Yes, she will make more than $1,000 in the next 10 weeks

Caleb expects to work an average of 12 hours a week during the next semester. Assuming he makes $9.50 an hour and works the entire 17 week semester, what is his forecasted income next semester? (This is his only job)

• $114
• $2,000
• $1,938

Assume your phone bill averages $45 per month and you have a car payment that is $140 per month. You also spend about $20 a week on food. How much are your monthly expenses? [Hint: assume there are 4 weeks in the month]

• $265
• $205
• $245