EPF Module 14

When interest is earned not only on principal but also earned on interest, it is referred to as

• returned interest

• duplicated interest

• simple interest

• compound interest

Net worth is calculated by 

• subtracting liabilities from assets

• subtracting assets from liabilities

• adding liabilities to assets

• dividing assets by liabilities

Which of the following are strategies that help in saving for an emergency fund?

• Start small, focus on the costs, and treat savings like a bill.

• Start big, focus on the benefits, and treat savings like a bill.

• Start small, focus on the benefits, and treat savings like a bill.

• Start small, focus on the benefits, and treat savings like an option.

Are fixed costs considered to be anticipated or unanticipated costs? Are variable costs considered to be anticipated or unanticipated costs? 

• Fixed costs are anticipated costs and variable costs are unanticipated costs.

• Fixed costs are anticipated costs and variable costs are anticipated costs.

• Fixed costs are unanticipated costs and variable costs are anticipated costs.

• Fixed costs are unanticipated costs and variable costs are unanticipated costs.

Examples of unanticipated income include

• wages, bonuses, inheritances

• gifts, scholarships, inheritances

• gifts, bonuses, allowances

• gifts, bonuses, inheritances

A budget is a plan for spending money based on income, expenses and 

• assets

• liabilities

• financial goals

• net worth

Which of the following is not included in a net worth statement?

• $300 in a checking account.

• $50 per month for a gym membership

• $400 per month for school loans; the current balance is $25,000.

• Balances on credit cards that total $15,000.

Being aware of the Federal Reserve's monetary policy and how it can affect interest rates can impact planning for major purchases.   When interest rates rise the Federal Reserve is combating _________ and makes it _____________   expensive to finance a car or a home loan.

• inflation; more

• inflation; less

• unemployment; more

• unemployment; less

At the end of the month Corrine's budget has money left over. She can either 

• Spend more or save less.

• Spend less or save more.

• Spend less or save less.

• Spend more or save more.

In making a decision about the costs of postsecondary education, these costs should be compared to 

• potential number of years in postsecondary education

• potential number of years working in a career.

• future potential earnings.

• the length of time to pay off private loans.