Graded Assessment - Savings 101

Which of the following is a short-term savings goal?

• Saving to start a business.

• Saving to pay rent.

• Saving for a down payment on a house.

• Saving for college.

Your friend's parents are worried about going over their budget for the month. Which expense would you suggest is NOT a need?

• Rent payment

• Car Insurance

• Cable service

• Groceries

Why would you put money into a savings account?

• To earn interest on your money.

  
  

• To make frequent withdrawals at ATM's.

  
  

• To access the money from this account with personal checks.

  
  

• To easily access money from this account with a debit card.

  
  

Which of the following is a long-term savings goal?

• Saving to remodel your home

• Saving for travel

• Saving for retirement

• Saving to pay rent

Saving is easier when you put small amounts away.

• 
  

• True

• False

What does “Pay Yourself First” mean when it comes to saving?

• 
  

• • Prioritize your wants and flexible spending over all other types of spending

  
  

• • Each time you get paid, set aside money for savings before making any purchases

  
  

• • Keep all of your money in just one account so it’s easier to manage

  
  

• • Pay all of your bills first and if you have extra money, then consider putting it in a savings account

  
  

If Jason starts with a principal of $50 at a rate of 3% interest, how much will he earn in interest over 5 years?

• $7.50

• $23.20

• $13.75

If Terrence starts with a principal of $500 at a rate of 2% interest, how much will he earn in interest over 10 years?

• $200

• $50

• $100

True of False: Pay Yourself First means that you will automatically put some money into your savings before you spend any.

• True

• False

The money you earn is referred to as

• 
  

• Investment

• Interest

• Income

• Savings