AFA Midterm Review

What does each variable in the simple interest equation represent?

• Principal, rate, time

• Principal, rate, interest

• Principal, time, interest

• Rate, time, interest

What does each variable in the compound interest equation represent?

• Principal, rate, time

• Principal, rate, times compounded

• Principal, time, times compounded

• Principal, Rate, times compounded, time

How much should you invest at the beginning of 2 years if you want to have $1000 in an account that earns 8% interest and is compounded monthly?

• $1000

• $913.27

• $852.60

• $1118.23

What is the difference between simple and compound interest?

• Simple interest is calculated on the principal amount only, while compound interest is calculated on both the principal and the accumulated interest

• Simple interest is calculated annually, while compound interest is calculated monthly

• Simple interest is always higher than compound interest

• There is no difference between simple and compound interest

What is inflation and how does it affect your bank accounts?

• Inflation is the decrease in the price of goods and services over time, and it increases the purchasing power of your money

• Inflation has no effect on bank accounts

• Inflation only affects savings accounts, not checking accounts

• Inflation is the increase in the price of goods and services over time, and it reduces the purchasing power of your money

What is FAFSA?

• Financial Aid for Students and Families

• Free Application for Federal Student Aid

• Financial Assistance for Student Aid

• Federal Aid for Student Assistance

What is the difference between work study, scholarships, student loans, and grants?

• Work study is a program that allows students to work part-time on campus, scholarships are financial awards based on merit or need, student loans are borrowed money that must be repaid with interest, and grants are financial awards that do not need to be repaid

• Work study is a program that allows students to work full-time on campus, scholarships are financial awards based on merit only, student loans are borrowed money that does not need to be repaid, and grants are financial awards that must be repaid with interest

• Work study is a program that allows students to work part-time off campus, scholarships are financial awards based on need only, student loans are borrowed money that must be repaid without interest, and grants are financial awards that do not need to be repaid

• Work study is a program that allows students to work full-time off campus, scholarships are financial awards based on merit and need, student loans are borrowed money that must be repaid with interest, and grants are financial awards that do not need to be repaid

What is the difference between net and gross pay?

• Net pay is the total amount of money earned before deductions, while gross pay is the amount of money received after deductions

• Net pay includes bonuses and overtime, while gross pay does not

• Gross pay is the total amount of money earned before deductions, while net pay is the amount of money received after deductions

• Gross pay includes bonuses and overtime, while net pay does not

What is the difference between sticker price, net price, and expected family contribution?

• Sticker price is the full cost of attendance, net price is the cost after financial aid, and expected family contribution is the amount the family is expected to pay

• Sticker price is the cost after financial aid, net price is the full cost of attendance, and expected family contribution is the amount the family is expected to pay

• Sticker price is the amount the family is expected to pay, net price is the full cost of attendance, and expected family contribution is the cost after financial aid

• Sticker price is the amount the family is expected to pay, net price is the cost after financial aid, and expected family contribution is the full cost of attendance

What is the difference between soft and hard skills?

• Soft skills are specific technical skills and knowledge, while hard skills are interpersonal skills and personal attributes

• Soft skills are interpersonal skills and personal attributes, while hard skills are specific technical skills and knowledge

• Soft skills are skills that are easy to learn, while hard skills are skills that are difficult to learn

• There is no difference between soft and hard skills