Financial Decision Making Quiz 2022-23

Steve deposited $5,000 in a savings account that pays 4% interest compounded annually.

Which equation could be used to find the value of the account after 3 years?

• A = 5,000(1 + 4)³

• A = 5,000(1 + 0.04)³

• A = 5,000(1 + 0.4) x 3

• A = 5,000(0.04)³

In the compound interest formula A=P(1+r)^t what does the P stand for?

• The time

• The total amount

• The principal amount (original amount)

• The interest rate

Patrick deposits $750 into a college savings account that is compounded annually when his parents received as a stimulus package. If Patrick lets the money sit in the account without adding or removing any and receives a 8.5% interest rate, how much money will he have total after 5 years?

• $1127.74

• $1535.24

• $2345.67

• $850.76

The Jefferson family took out a loan for a home. The amount was $195,000 at a 4% interest rate compounded annually, how much will they have paid after 30 years?

• $412,489.75

• $529,586.31

• $632,462.51

• $640,891.12

Semi-Annually means how many times a year?

• 4 
• 2
• 1
• 6

Bruno was given $2000 at birth . His parents invested it at a 2% interest rate compounded annually. No deposits or withdrawals were made. Which expression can be used to determine how much money Bruno had in the account when he turned 13?

• 2000(1+0.02)¹³

• 2000(1-0.02)¹³

• 2000(1+0.02)¹⁶

• 2000(1-0.02)¹⁶

What does APR mean?

• Average Person Ratio
• Annual Percentage Rate
• Always Poke Robots
• Apples Peas & Rice

Benefits of credit cards include:

• safe and convenient, bonuses are offered
• allows you to build a positive credit report
• needed for reservations and online shopping
• all of these

How can you avoid paying interest fees on your credit card?

• Only use it for groceries
• pay off the full balance, on time, each month
• you cannot avoid interest fees
• only use Discover

Paying the minimum payment on a credit card every month will:

• Pay a large percentage of the total balance owed every month
• Make the final amount paid substantially higher than the amount initially charged to the card
• help the cardholder create a plan for paying of a credit card in a decent amount of time
• allow the cardholder to avoid paying any interest charges