Chapter 2: Savings Vocabulary Quiz

Hannah invests $1000 in a savings account. The account earns interest, which is added to the principal amount. In the following years, the interest is calculated on the new principal amount. What type of interest is this?

• Interest earned on top of interest

• Interest earned daily

• Interest earned monthly

• Interest earned annually

Mason, Abigail, and Ava are discussing the importance of having an emergency fund. What is an emergency fund?

• Savings for emergencies

• Savings for vacations

• Savings for retirement

• Savings for education

Aiden wants to take a loan from a bank. What is the interest rate he will be charged?

• Rate charged by the bank for borrowing money

• Rate charged by the bank for saving money

• Rate charged by the bank for investing money

• Rate charged by the bank for paying off debt

Olivia, Anika, and Benjamin attended a financial literacy workshop where they learned about the Five Foundations. What are these Five Foundations?

• Steps to achieve financial success

• Steps to achieve physical fitness

• Steps to achieve academic success

• Steps to achieve personal happiness

Emma, Oliver, and Noah are planning to buy a car after their graduation. They decided to save a certain amount of money every month for this purpose. What is this method of saving money called?

• Saving money over time for large purchases

• Saving money for emergencies

• Saving money for retirement

• Saving money for daily expenses

Abigail has just received her first paycheck and is considering opening a savings account. Benjamin suggests that a savings account is:

• An account used to save money that accrues interest

• An account used for daily expenses

• An account used for investing in stocks

• An account used for paying off debt

Harper has a negative savings rate. What does this mean?

• Harper is spending more than she saves

• Harper is saving more than she spends

• Harper is earning more than she spends

• Harper is investing more than she saves

In the context of personal finance, how does Avery's character affect their financial decisions?

• The mental and moral qualities distinctive to Avery

• The physical appearance of Avery

• The financial status of Avery

• The educational background of Avery

Liam, Arjun, and Grace are discussing investment options. They come across the term 'mutual fund'. What is a mutual fund?

• A professionally managed investment fund that pools money from many investors

• A fund that is managed by an individual investor

• A fund that invests in a single company

• A fund that invests in real estate

Isla is planning her activities for the summer vacation. Which of the following would be considered a short-term goal?

• Reading a book she has been wanting to read

• Learning to play a musical instrument

• Completing her summer homework within a week

• Visiting Sophia and Daniel within a month